November 2022, Virtual
21 November 2022, Hilton London Metropole
THE US-BASED BUSINESS TRAVEL COALITION (BTC) is warning of proposals by American Airlines to move to a system where its selling costs would be passed on to the customer. The BTC said American Airlines was floating the idea of bringing "a wholesale shift of distribution costs to the corporate customer". BTC added that its members have been approached by the carrier to explore the idea of a relationship known as Direct Connect, which would unravel the current model, where airlines fund merchandising and selling activities, and replace it with a "user pays" model. BTC chairman Kevin Mitchell said this meant a more complex and costly system whereby the airline only offered high-value transactions for free. Other transactions would be subject to merchandising charges and sale fees.
"In other words, virtually all merchandising and distribution costs would be shifted to TMCs, and ultimately on to the backs of the airline's best customers," said Mitchell. Norman Gage, Advantage Travel Centres' business travel director, said the US proposals would not necessarily be repeated in the UK. "This comes up every now and then when people are looking at cutting GDS costs," he said. "It is easier to implement things over there because the industry is so fragmented. Every state has a different travel agency grouping whereas here, we have national entities. In the UK we also have one major carrier, but in the US it is a bit more of an even platform."