Air France-KLM had hinted at adding a distribution surcharge as far back as 2015, so the announcement doesn’t come as a surprise. What it does tell us is that airlines are increasingly confident that the positives of introducing such a fee outweigh any negatives.
The change, which had long been suggested, is part of what the airline group is calling a “new distribution strategy”, which will see it take back more control of how it sells its products. This will involve more personalized offers, greater content and dynamically built product bundles.
The new surcharge will start on April 1, 2018. Like other big players in the industry, Air France-KLM wants make more use of airline body IATA’s New Distribution Capability (NDC), a set of technology standards that will help airlines connect with travel agents and in effect bypass third party distributors such as Sabre and Amadeus.
There will be no charge for travel agency sales made through NDC or through any of the airline group’s direct channels.
Meanwhile, the company is also planning a “complete re-engineering” of its loyalty programme Flying Blue. The full changes will be announced on November 6 but Air France-KLM is promising customers “more simplicity and flexibility, a clearer earning scheme, more options to spend their miles on flights and flight-related services.”
Air France-KLM has continued its impressive turnaround with a solid set of third-quarter results.
Pre-tax profit during the period rose by 13 percent to $850 million (€730 million). Revenue increased by 4.3 percent to $8.4 billion (€7.2 billion).
Jean-Marc Janaillac, the company’s Chief Executive, said: “The strong operating performance achieved by the Group in the third quarter reflects a sustained execution on our strategic priorities, as well as a robust business environment translated into solid traffic and unit revenue trends. We continued to move forward notably with the expansion of our network of strategic alliances and the implementation of a new distribution model.”
Photo credit: An Air France A340. Parent company Air France-KLM is introducing a distribution surcharge in 2018. Air France