Wasn't the whole point of these surcharges to prevent the global distribution systems from taking a cut of that juicy ancillary money that is now flowing in? One has to wonder what the terms of Air France-KLM's deal with Amadeus and Travelport really are. For now, it looks like the global distribution systems that took the new distribution capability seriously are reaping the rewards.
On the cusp of Air France-KLM imposing a surcharge on global distribution system bookings for its flights, Sabre is still searching for a way to avoid the surcharge while its rivals have already struck a deal.
As Skift reported in November, the ramifications of this surcharge will likely have a bigger impact on the travel ecosystem than previous moves from Lufthansa and British Airways; Amadeus executives said nearly 20 percent of the flights placed through their system could have a surcharge attached, potentially pushing travel agents to book on airline websites instead.
Airlines are trying to spur bookings through their own websites and channels because bookings that travel agents and corporations make through third-party global distribution systems cost the airline in higher fees.
Global distribution system providers Amadeus and Travelport have cut a deal with the airline group to avoid the surcharge, and on the travel management company side, BCD Travel has reached an agreement, as well. Amadeus said the deal also includes “a transitional agreement towards the integration by Amadeus of Air France-KLM’s API based on the IATA New Distribution Capability. It sets the framework for a sustainable, long-term solution that suits Amadeus customers for NDC-enabled distribution.”
UPDATE: Expedia Group announced on April 4 that it has reached a deal to avoid the surcharge.
Sabre, though, remains in negotiations for now.
An email sent to Sabre agents provided to Skift shows that it is unlikely to reach a deal before the surcharge goes into effect on Sunday.
“At this time, we want to reassure you that our negotiations with the AF/KL group continue, with the objective to reach a new distribution agreement that provides mutual benefit and value to all constituents in the distribution landscape,” reads the email sent to Sabre’s travel agency and corporate clients. “Based on the information received from the AF/KL group, their surcharge will be reflected as a YQ surcharge filed with ATPCO. The AF/KL YQ surcharge will not require any changes to your current Sabre booking workflows. Moving forward, we will send you further updates should a new distribution agreement be reached.
“Please be assured that it is our number one priority to develop new technology standards and capabilities, such as NDC, as we believe these will ultimately bring unique opportunities for end-to-end airline retailing and distribution models that benefit all parties in the travel ecosystem.”
Sabre said it is trying to work it out with Air France-KLM.
“We are aware of the importance in reaching a timely agreement with Air France-KLM and are working to define terms that will work for all parties,” wrote a Sabre spokesman. “We continue to reassure our agency customers that reaching an agreement with the airline group is a top priority. Our goal would be to offer access to competitive Air France-KLM content through the Sabre GDS and to provide a balanced solution that gives benefit and value for agencies, airlines, and travelers.”
It turns out that after years of blowing smoke about the importance of developing more advanced distribution technology, global distribution systems that have taken the initiative could face an easier path forward as more airlines use leverage to encourage direct bookings.
Subscribe to Skift Pro
Subscribe to Skift Pro to get unlimited access to stories like these ($30/month)Subscribe Now
Photo Credit: An Air France A380. Travelport was the first global distribution system to strike a deal with Air France-KLM over airline surcharges. Air France
A New List of the Most Valuable Public Travel Companies
Old school travel companies still largely dominate in terms of stock market valuation, but there is no denying the disruption sparked by Airbnb’s debut on the stock market.
Cameron Sperance | 1 day ago
Hopper Partners With Spirit Airlines to Help It Sell More Extras
A significant ancillary play from the Canadian online travel agency, but not quite the leap forward for so-called new distribution capability in the U.S. many would want to see, given Spirit's reach and target flyers.
Matthew Parsons, Skift | 5 days ago
Lufthansa and Travelport Reach Ceasefire in Distribution Battle
Lufthansa appears to be playing well what could've been a weak hand in its negotiations with distribution middlemen. But this deal also may help tech player Travelport level the playing field with some of its rivals.
Sean O'Neill, Skift | 5 days ago