Technology

IAG’s BA and Iberia announce increased GDS charge

Posted by Ian Taylor on
IAG’s BA and Iberia announce increased GDS charge

IAG-owned British Airways and Iberia will increase their surcharges on GDS bookings by between 10% and 12.5% from September 18.

The BA and Iberia GDS fee will rise from €9.50 or £8 per fare component to €10.50 and £9, meaning the addition of €21 or £18 to a return fare.

The fee is added to all fares booked through online and offline travel agents and travel management companies (TMCs) which lack direct connections to the airlines’ systems or agreements with the carriers to develop new distribution capability (NDC) channels.

NDC is airline association Iata’s standard for private channels which enable leisure travel retailers and TMCs to take fare content via APIs (application programming interfaces) with carriers’ systems.

BA and Iberia introduced the fee, or distribution technology charge, last November.

Lufthansa and group airlines Swiss and Austrian Airlines have levied a €16 distribution cost charge on GDS bookings since September 2015, and Air France-KLM added an €11 fee to GDS bookings from April this year.

BA and Iberia have agreed a succession of deals with TMCs and some leisure agencies to waive the fee, including with corporate travel giants CWT, HRG and American Express GBT.

A BA spokesman said: “The increased distribution technology charge applies to bookings not made using an NDC-based connection or through other low-cost channels such as our website, sales offices and call centres or IAG booking portals.

“We periodically review our distribution costs to ensure the charge reflects the current additional costs incurred for bookings through higher-cost channels.”

Claims that traditional GDS bookings are ‘higher cost’ are disputed.

Christoph Klenner, who until August was secretary general of the European Technology and Travel Services Association (ETTSA) told a committee of the European Parliament investigating ‘airline distribution channel discrimination’ in July:

“An independent study by Infrata in the UK compared direct versus indirect distribution and [found] indirect distribution is on a par with direct distribution in terms of cost.”

Asked by MEPs how much the GDS surcharge by Lufthansa has cost and who pays it, Klenner said: “Based on Lufthansa Group’s annual report, almost €1 billion has been paid by customers of Lufthansa over the last three years.”

Emmanuel Mounier, former attaché for industrial affairs at the French Permanent Representation to the EU, took over as secretary-general of ETTSA this month.

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