IAG carriers British Airways and Iberia are unprepared for their own ‘GDS fee’ deadline next week, with their new distribution capability (NDC) portal “unfit for purpose” according to industry figures.
BA and Iberia have touted ‘direct connect’ though their own portal as a way to avoid the GDS surcharge.
Leading travel management companies (TMCs) Carlson Wagonlit Travel (CWT), American Express Global Business Travel and HRG – and leisure agencies including Flight Centre Travel Group – have signed deals to avoid BA and Iberia’s €9.50 surcharge per ‘fare component’ on GDS bookings from November 1 while continuing to book via GDS.
But in a note to clients, CWT said: “There is no direct connect solution in the marketplace which addresses the impacts in an efficient manner.”
It added: “There is no content distribution alternative which offers the depth and breadth of the GDS.”
CWT confirmed its customers would “avoid the airlines’ proposed surcharge on bookings created within participating GDSs”. But so far only Amadeus has agreed.
An Amadeus spokesperson said: “Amadeus strongly believes indirect distribution remains the most cost-efficient solution for all parties.”
One senior UK industry figure told Travel Weekly: “BA is not ready, whatever it says. Its portal does not seem to be working. It is not fit for purpose.”
Another said: “Even if the portal did work, it would break TMCs’ work flow. Bookings have to be via the GDS from a TMC point of view.”
BA and Iberia claim the ‘distribution technology charge’ is to cover the “additional costs applied through these [GDS] channels”.
The airlines say agents, OTAs and TMCs can avoid the fee by booking direct or committing to or using a connection based on airline association Iata’s NDC.
Lufthansa has added a €16 surcharge to GDS bookings of its group network carriers since September 2015.
Air France-KLM is expected to follow suit by announcing a GDS fee within days.
However, Air France-KLM partner Delta Air Lines ruled out such a move last week with chief executive Ed Bastian telling Travel Weekly: “We have no plans to implement that sort of surcharge.”
NDC is not, in principal, the problem, say industry leaders. One UK figure said: “In itself, NDC could be good thing. But it could allow opaque pricing [by airlines].”
A senior European industry representative agreed, noting: “We’re already on NDC version 17.2. That is an awful lot of versions. The potential is to discriminate not standardise.”
GDSs, TMCs and their corporate clients insist on transparent pricing and the ability to compare fares.
In its note to clients, CWT warned of content fragmentation, decreased price competition, limits on companies’ ability to manage travel changes, a reduction in TMCs’ ability to support travellers during emergencies, disjointed data provision and confusion among travellers.
It also warned that bookings made outside the GDSs may have to carry a fee “to offset the time and costs” of combating this fragmentation.
CWT said this would involve “non-standard manual processes which are more labour intensive, create additional cost and complexity, and provide a degraded customer experience”.