Is the current distribution war finally cooling down, or have the opponents gone back to their foxholes to regroup?
American Airlines reversed its plan to charge travel agents outside the U.S. and the Caribbean a “booking source premium” for booking the carrier through Travelport GDSs.
In turn, Travelport dropped the increases in segment fees it imposed on American as part of its response to the carrier’s tussle with Orbitz, Travelport’s largest customer for GDS services.
In late January, American and Sabre issued a joint announcement of a “truce,” setting aside their legal battles until June 1.
It’s not clear whether any of the parties are making a real effort to resolve their differences before American’s GDS contracts expire in late summer, or whether they have come to the realization that noisy, ugly, very public battles aren’t good for business.
Customers don’t like them, especially when it makes it more difficult to find low fares. Travel managers and agencies don’t like the uncertainty they cause.
And while Wall Street may appreciate an airline’s diligence in attempting to reduce distribution costs, it gets nervous if the airline alienates everyone with whom it does business in the process.
American’s booking source premium, which ranged from $2 to $21 depending on the country and on whether the booking was made in Galileo or Worldspan, were slated to go into effect on Dec. 20. At the time, the carrier said it would begin collecting the added fees via automated debit memo this month.
But at the beginning of February, an American spokesman said the carrier was “still doing processing work for issuing the debit memos, and at this point we do not anticipate that memos will be sent out this month.”
He said the carrier would be in a “better position to more accurately estimate when debit memos will begin to go out in a few weeks.”
The surcharges were designed to cover “dramatic” increases in segment fees assessed by Travelport in several international points of sale.
In a Feb. 16 letter to travel agencies, Derek DeCross, American’s vice president of sales, said that in removing the Booking Source Premium, “we expect Travelport to immediately drop the false tax it unilaterally has added to American’s fares and imposed on the traveling public.”
In a statement, Travelport chief commercial officer Kurt Ekert said, “We welcome AA’s decision to remove its surcharges,” and “as a result of AA’s decision, Travelport will remove the AA surcharge fee,”
effective Feb. 17 at 12 a.m. GMT.
American’s plan to use automated debit memos to collect the booking source premium also was controversial. Several agency groups claimed the process would violate IATA rules, and they planned to take their complaint to IATA.
The American Society of Travel Agents noted that “IATA Resolution 850 states that the airlines can use the BSP system to collect debits related to the ‘issuance and use of Standard Traffic Documents.’ Yet AA’s use of the BSP system to forcibly collect ‘booking’ related surcharges may be outside the scope of the agency agreement.”
Meanwhile, American and Travelport are due to meet in Cook County (Chicago) Circuit Court again in March, where they are suing each other.
Travelport amended its lawsuit, saying American violated its full-content agreement by providing a not-so-exclusive deal to Kayak users (see story, this page).