Travelport Expects ‘Large Majority’ Of Its BA/Iberia Bookings To Use ‘Private Channel’

By | November 1, 2017

Travelport expects most bookings on British Airways and Ibera to be subject to the carriers’ new private channel option. That implies lower GDS incentive income for travel management companies.

Travelport president and CEO Gordon Wilson on Thursday morning told investors that while negotiations were ongoing, “We think a large majority of our business with International Airlines Group is going to end up in this private channel. What may change is the flow between revenue and commission. It may well be that the revenue doesn’t change that much but the commission might because of the way BA are structuring these individual deals with agencies.”

“Revenue” refers to segment fees paid to Travelport by airlines while “commission” represents the fees GDS companies like Travelport pay to travel agencies.

Adopting the private channel allows TMCs to shield clients against a British Airways/Iberia surcharge that took effect Wednesday.

Wilson said the airline company is “seeking key agencies to engage with us to enable non-surcharged content in exchange for different booking fees and potentially also different levels of commission or rebate that we pay to those travel agencies.”

Travelport CEO Gordon Wilson

Wilson described the targeted agencies as corporate travel specialists operating in Spain and the United Kingdom. He noted that American Airlines encouraged U.S. agencies to book its partner IAG carriers using the AA code to avoid the surcharge. While Wilson said IAG could push the model elsewhere in Europe, he did not see it spreading to Asia or Australia.

BCD Travel on Tuesday indicated it expected Sabre and Travelport to follow Amadeus in agreeing to the private channel arrangement.

Mimicking similar announcements by American Express Global Business Travel, Carlson Wagonlit Travel, HRG and others, BCD Travel said it signed a “multi-year deal” in which BCD was “strongly committed” to working with the airlines and technology providers “to determine how new technologies and distribution capabilities can be implemented to improve the travel experience for mutual clients and travelers.”

BCD also noted that it was “committed” to retaining the benefits of traditional distribution. That includes “the ability to shop from among multiple competing offers.” BCD Travel also “will continue exploring the option of GDSs providing a viable NDC solution.”

According to a Sabre spokesperson, “We want to reassure our customers that we are urgently working to sign a technology agreement to obtain BA/Iberia content through the Sabre GDS. Once in place, agencies will need to speak directly with BA/Iberia (or BA/Iberia will contact agencies directly) regarding commercial options to access this content. Our driving goal has been and continues to be a balanced solution that provides benefit to both BA/Iberia and our agency customers.”

Related

BA Champions IATA’s NDC For Corporate Travel

GBTA Takes Airline Distribution Head-On

NDC’s Upshot: Altered TMCs, Evolved Air Deals

Who Are The Would-Be New Aggregators?

 

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution is illegal.

Leave a Reply

Your email address will not be published. Required fields are marked *