ACTA welcomes Northwest Airlines decision to rescind an earlier decision to charge travel agencies a fee to book their fares through the GDS…
ACTA welcomes Northwest Airlines decision to rescind an earlier decision to charge travel agencies a fee to book their fares through the GDS. It was through an early evening phone call to ACTA from Robert Dungan, Northwest Airlines representative in Canada, and later confirmed in a media release by the company, that ACTA learned that the carrier has withdrawn its “shared GDS fee” incurred by travel agencies in the U.S. and Canada. “It appears that the overwhelming opposition to the fee by the travel distribution community, including travel agencies and GDS service providers across both countries, prevented other airlines to move in lockstep with Northwest” said Marc-Andre Charlebois, President & CEO of the Association of Canadian Travel Agencies (ACTA).
The problem remains, however, that distribution costs is very much in the carriers’ crosshairs as a major source of expenditures. Until distribution costs reach a comparative level, whether fares are booked through a carrier’s Website, at a call center, the airport or through a travel agency, we can expect airlines to continue to look at “creative” ways of trying to streamline these costs. “We must remain vigilant,” added Charlebois, “the game is far from over. Low cost carriers have set new standards in terms of cost controls and traditional carriers still have a lot of catching up to do.”
ACTA believes that in their struggle to reinvent their business model, airlines should avoid the temptation to pass down some of their inefficiencies through the distribution system to the consumer. At the same time, GDS service providers also need to adjust their offering, and airline charges, to reflect the new business order. ACTA will maintain a watching brief on this issue and will continue to engage the airlines and GDS providers in productive communications with a view to avoiding turbulence as the industry adjust to these new realities.
In Canada, the liberalization of the CRS rules is allowing Air Canada to work with GDS providers to achieve the economies it had been looking for. According to the airline, it has managed to bring its distribution costs to a level where it feels it can compete head-to-head with low-cost carriers on domestic routes. “This type of orderly transition to a new model is the one the travel market so desperately needs and the one we advocate”, concluded Charlebois, “where key travel players work out their differences to arrive at a solution that ultimately benefits consumers.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
