british airways questions gds charges

BRITISH Airways is ready to axe its products from one of the four global distribution systems unless they all lower their costs – further distancing itself from the trade.

The move – the latest cost-cutting measure to emerge as part of its Future Size and Shape review – could effectively deny thousands of travel agents access to BA fares.

Speaking at the Guild of Business Travel Agents conference in Toronto, BA general manager field sales Ian Heywood warned: “The GDS costs are unacceptable and we can’t continue to pay the prices being demanded of us.

“We either work together or we will be forced to put into place a solution of our own.

“We could limit the number of GDSs we use, move towards a tendering process and then work with those who offer us the most competitive price.”

Airlines pay a typical fee of around £5 per ticket when a booking is made via a GDS in the UK.

Most agencies have deals with just one system –  so if BA dumped one GDS it could potentially exclude a quarter of its agency network. Although high-street agents are increasing using consolidators to find competitive BA fares, many domestic and international routes have to be booked through the agency’s GDS system.

“If we got rid of one GDS, it would mean things have got pretty bad,” said Heywood. “But if we can’t come to a managed solution, we will impose our own and that would make it very messy in the marketplace.”

Separately, BA general manager global distribution Chris Vukelich said the carrier had been charged £75 by a GDS for customers checking availability on an on-line agency.

“The cost of booking by segment has reached £75. We need to do something because the GDS companies cannot continue to do this.”

Sabre senior vice-president for Europe, Middle East and Africa Chris Kroeger said its 3% fee increase this year was the lowest increase for 10 years. Galileo general manager UK Pat Minogue said it had been looking at ways to resolve the issue but said it had not yet come up with any solutions.

Amadeus director of marketing Mark Lewsey argued its fees were the lowest of the GDSs and the company charged a “professional fee for a professional service”.

Worldspan staff vice-president business development Europe Middle East and Africa Tim Wright said the company was willing  to listen to ideas from BA.