Alarm bells for GDS after British Airways imposes surcharge

By Shayan Shakeel 24 July 2017

The Global Distribution System for tickets and pricing is under renewed pressure after British Airways announced today that it would begin imposing a $10 surcharge on all bookings through non-airline travel agents from 1 November.

British Airways was joined in its announcement by network partner Iberia Airlines. The news brings to four the tally of airlines that have opted to add surcharges on GDS bookings.

GDS' such as Amadeus, Travelport and Sabre, have been an major part in the evolution of the aviation industry. Through their networks of travel agents across the world they serve as the gateway to millions of passengers who continue to choose to fly by booking tickets via travel agents. 

However, the GDS business is coming under threat.

Airlines had first indicated a willingness to move away from the model when they began opening airline storefronts manned with their own travel agents pushing their own fares.

With the proliferation of the internet, airlines can offer customers a way to view their offering and ticket prices in dynamic real time.

Partnerships with companies such as Google and Facebook are also being explored as ways for airlines to divert more traffic to their shores by pushing online sales.

Lufthansa was the first major airline to signal a shift away from GDS' by imposing a 16 euro surchage in 2015.

At the time, Henry Harteveldt, aviation analyst at Atmosphere Research Group had said in an interview with Travel Market Report, “It means a second airline has now followed Lufhansa’s lead, and others might be inclined to consider it... The question is whether we will see any of the other network airlines embrace it.”  Any new fee can generate a backlash, and particularly for price-sensitive leisure travelers, could lead to booking away from a particular carrier. "

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