In a statement condemning the recent move by Northwest Airlines to start charging travel agencies as of September 1…
In a statement condemning the recent move by Northwest Airlines to start charging travel agencies as of September 1 for travel bookings made via a global distribution system, Amadeus said the air carrier was creating an unfair bias against passengers who choose to use a travel agency instead of the airline`s website.
We are disappointed that Northwest is penalizing travel agencies and, ultimately, the consumer who chooses a travel agency to book their flight, said Kay Urban, President and CEO of Amadeus North America. Northwest`s move to tack on an artificial GDS booking fee for agency-booked travel has created a chaotic situation, to say the least.
Describing Northwest`s strategy as arbitrary and capricious, Urban pointed out that the shift from the current GDS model to one favoring
proprietary distribution tools not only will cut out benefits to the consumer that only a travel agency can deliver, but very likely will result in higher ticket costs, reduced service, and less efficiencies for the traveler.
We`re not surprised to see airlines experiment with new business models, especially with the pressure on their bottom lines, Urban said. But as bold
and controversial as Northwest`s move is, in actuality it cuts only a small portion of their operating costs.
She noted that GDS fees typically represent only one to two percent of an airline`s total costs – a percentage very much in line with distribution costs in other industries.
Urban added that Amadeus travel agents are already taking actions to retaliate against Northwest`s initiative, including dropping Northwest bookings.
The Northwest surcharge essentially represents an increase to the price of the ticket that is paid by the consumer, continued Urban. Therefore, Amadeus will flag all Northwest fares in the fare display to ensure that travel agents can easily tell those that are subject to these surcharges. Amadeus also plans to enable travel agents to view the total cost of the Northwest
fare — inclusive of the imposed fare supplement. This will provide an adjusted display that reflects the true price to be paid by the consumer.
And although other GDSs have made the decision to bias their airline displays as a result of the Northwest move, Urban says Amadeus has always believed and travel agents have clearly communicated that they, the agents, want biasing control in the hands of the agency, not the GDS.
Urban said Amadeus agents have tools at their fingertips that allow them to customize their desktop displays and sell only their preferred carriers. Amadeus Travel Choice is an agency tool that offers several airline preferencing options, from completely excluding a supplier to displaying preferred suppliers by city or country. Travel Choice is available free of charge for all Amadeus customers in the U.S. and Canada.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
