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BA plans new cuts

BRITISH
Airways has set its sights on slashing global distribution and credit card
costs after ditching sector payments for 1% commission.

The flag
carrier has targeted GDSs as the next distribution cost it needs to tackle and
will make an announcement on its GDS strategy imminently.

BA is
believed to be at an advanced stage of talks with the GDSs over a fee reduction
scheme. Galileo confirmed it is close to signing a deal with the airline.

BA head of
UK sales Tiffany Hall said: “Our objective is to reduce costs and GDS fees are
part of that. It’s an extremely complex area so there is no timescale.”

BA has
threatened to pull its products out of one of the GDSs in the past, a task that
will be made easier when deregulation of the GDSs is rubber-stamped either late
this year or early next year.

Hall
insisted this is a route the airline would prefer not to go down. She said:
“Our ideal is to continue to work with all the GDSs because they are an
effective distribution model.”

The
airline is also looking at charging a fee when customers pay with a credit card
through ba.com or its telephone service.

Hall said:
“We have no immediate plans to start charging but low-cost airlines do and an
increasing number of full-service carriers are starting to, so it’s something
we are looking at. We have to bring our costs down to compete with rivals.”

Meanwhile,
BA has denied it kept ABTA in the dark over its plans to cut commission to 1%.

ABTA said it only received official confirmation 10 days
before BA made its announcement, but the airline insisted talks had taken place
before.

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