Summary
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Today American Airlines announced that travel agencies that book through "non-preferred" distribution channels will pay a $3.50 per segment fee to AA.
This follows on the heels of the renegotiation of airline contracts with GDS companies (Sabre, Worldspan, Galileo and Amadeus) and the introduction of a new concept known as "OPT-IN".
Bottom line is that airlines are rejecting the notion that travel agencies using a GDS should continue to receive all their content (fares and availability) without someone paying them for that content.
So the one at the bottom of the food chain - foots the bill. This could mean that consumers (including corporations for their corporate travelers), pay more if they use an agent.
Now the GDSs have to decide how they will react to AA's move.
Analysis
American Airlines today detailed on its Web site a plan to charge travel agencies $3.50 per segment when they book AA tickets through non-preferred distribution channels, effective Sept. 1. The airline also indicated it may "withhold content" from those channels, particularly if what it called an "other booking source" does not "display American content on neutral terms as compared with other airlines."
The definition of "other booking sources" currently includes Sabre and Amadeus and the programs for Galileo and Worldspan (other than their new optional content access programs).
AA's announcement did not include opt-in Galileo and Worldspan programs, nor did it include G2Switchworks and Farelogix.
This only applies to bookings that originate in the US by US ARC accredited agencies and corporations.
The airline will use MIDT data (generated by the GDSs) to do the billing to agencies.
The million dollar question? Will other airlines follow suit or wait to see if there is fallout? The non-preferred GDSs could severely disadvantage AA by not showing them on the first screen of availability displays. The agencies can simply avoid AA altogether. Or they can succumb to the GDS opt-in programs and give up a piece of their existing incentive payments to the GDS company.
Time will tell, but it would have been so much more logical to come up with a positive incentive to get them to sell higher value tickets, as opposed to driving their only variable cost channel away entirely.
