British Airways and Iberia agreed to remove their global distribution system surcharge for users of Expedia and clients of its Egencia corporate travel arm, according to an Egencia spokesperson.
“As part of a wider Expedia/Egencia agreement reached by Expedia Inc. and IAG (BA and Iberia), travelers booking from EMEA and Asia Pacific have been surcharge-free since November 1, 2017,” the spokesperson wrote in a prepared statement. “North American bookings will be exempt from the distribution surcharge from the beginning of December 2017.”
The press official declined to provide more details, so it’s not clear whether the Expedia/Egencia program with BA and Iberia is similar to other agreements the airlines have struck with travel agencies. In those, travel agencies accepted a removal of GDS incentives while the GDS company reduced its fees to the airlines. The airlines, in turn, offered a new incentive to the travel management companies. This is according to comments by GDS executives including Travelport CEO Gordon Wilson and Sabre CEO Sean Menke.
Only Amadeus and Sabre so far offer a platform for such arrangements, though Travelport expects to. Expedia uses all three major GDS providers.
Some observers saw the IAG surcharge program as a way of sorting between higher-value and lower-value clients (read: corporate and leisure). Exempting Expedia may indicate that the sorting is at least partly about volume.
Expedia has been known to use completely different models for distribution in the past.