British Airways and Iberia parent International Airlines Group told investors last week that 17 percent of its indirect distribution volume is flowing through application programming interfaces or New Distribution Capability-based connections. IAG director of strategy Robert Boyle said the group is well positioned to beat the target of delivering 20 percent of indirect volume by 2020 as a participant in the International Air Transport Association's Leaderboard initiative.
International Airlines Group carriers British Airways and Iberia finally announced to the travel trade this morning a long-expected charge for bookings through indirect channels such as global distribution systems.
Amadeus during its third-quarter results presentation Wednesday acknowledged that moves by the three largest European airline groups to surcharge global distribution system bookings and drive bookings directly to their own channels are playing a role in disintermediating the GDSs. Yet, CEO Luis Maroto said he wasn't too worried about an acceleration in disintermediation.
British Airways and Iberia today enacted their surcharge on global distribution system bookings that amounts to $10 per fare component. Yet some large corporate clients will not be subject to the fee, at least for a period, multiple sources confirmed.
Sister airlines British Airways and Iberia have announced a "New Distribution Capability related agreement" that exempts Hogg Robinson Group from their distribution surcharge of €9.50 per fare component set to take effect Nov. 1.
With the clock ticking, Sabre and Travelport are nearing distribution arrangements that will help shield select travel management companies from the booking surcharge British Airways and Iberia plan to enact on Wednesday.
Late last month, Sabre stated that it was disappointed to see British Airways and Iberia initiate a surcharge on global distribution system bookings, effective Nov. 1, and to "impose costs and inconvenience for those using the GDS channel."
Australian flag carrier Qantas introduced a new commercial structure for travel agencies to promote adoption of New Distribution Capability-compatible connections, either through a global distribution system or another approved tech provider. Its pitch to agencies includes the threat of a $12.50 per-segment surcharge on GDS bookings and diminished content access but also a private channel-type framework as a path for agencies to avoid both.
Discussing the International Airlines Group's approach to global distribution systems in May, CEO Willie Walsh said British Airways and Iberia were "prepared to take some short-term pain to get some long-term structural change in that relationship."
On Tuesday, British Airways began testing new inventory buckets in business and economy classes on Boston and Dubai routes, some of which only are available for purchase through the airline's direct channels or New Distribution Capability-compatible connections.