The carrier told its corporate clients that it will begin accepting credit card payments for the fares beginning Oct. 1. It said some clients had complained that its policy had made payment processing too complicated.
The move puts an end to the feud between British Airways and American Express that began when the carrier ceased acting as the credit card merchant for corporate net fares in mid-2002, citing a need to cut distribution costs. The carrier said corporate clients could still pay for the fares with credit cards if their travel management companies acted as credit card merchants.
Although British Airways tried to downplay the impact of the policy, saying it affected only one set of fares in one country, its attack on credit card fees was closely watched. Having eliminated or reduced travel agency commissions and declared war on GDS fees, the airlines made no secret of their desire to extend their distribution cost-cutting battle to credit card fees.
British Airways and American Express took legal action against each other over the carriers policy. American Express said British Airways was in violation of its merchant agreement; British Airways sued to prevent American Express from terminating their agreement.
The two companies dropped their legal actions in 2004, saying they agreed it is in their best interest to pursue a mutually acceptable resolution outside the legal process.
Following British Airways reversal on credit card acceptance, it issued a joint announcement with American Express saying the renewed BA-Amexco credit card program would be joined by a new co-branded corporate card for small to medium-sized businesses.
The card will reward participating businesses with free business travel while allowing employees to earn BA miles on all expenditures.