British Airways gave deadlines of this week to some U.S. travel agencies that had not signed a private channel agreement waiving its GDS surcharge. After the megas, U.K. agencies and Expedia, not every travel management company offered the deal signed up, according to sources.
For agencies, agreeing to the private channel endorses a model that sacrifices GDS incentive payments. It includes collaborating on plans to explore the New Distribution Capability — adoption of which likely requires significant work. While U.S. travel agencies can avoid the surcharge by using the AA code where applicable, for some that may not cover enough of their business with BA.
Sources said BA was applying pressure purportedly because of the work required by Sabre agencies looking to shield clients from the $10 per fare component fee that took effect in November. This includes uploading IATA and pseudo city code numbers to be exempt from the surcharge. “Sabre has worked with BA/Iberia and several of our agency customers to implement private channel agreements, and we are already distributing enhanced fares (e.g. surcharge-free fares) to those customers,” according to a Sabre spokesperson. “As additional agencies reach agreement with BA/Iberia for access to private channel content, we stand ready to support their needs as well.” Sabre is the largest GDS provider in the U.S.
According to BA execs, the new distribution program is going as well as they could have expected it to. During an interview last week, they emphasized that different agencies were in different places with regard to airline distribution, particularly in terms of readiness to adopt NDC.
“BA wants to force it,” said a travel agency exec who requested anonymity due to the private nature of the discussions. “They’re saying if they start putting unique content into the private channel, we won’t be able to get to it. The whole thing is not well thought-out. They wanted to tear off the band-aid and wing it.”
Another said agencies were “scrambling” to figure out whether to sign and, if they decided against doing so, what that means.
“BA decided they had to force the market,” said the TMC exec. “It’s a fluid situation. It’s early in the life of all this, and there are so many unanswered questions. This is the first time each agency is negotiating content and distribution. That’s a whole new ballgame.”
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