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AA-TO Charge Agencies For GDS Content  
User currently offlinedldtw1962 From United States of America, joined May 2009, 393 posts, RR: 0
Posted (3 years 10 months 1 week 3 days 23 hours ago) and read 4121 times:

Hello everyone. I did not see this posted so I thought I would do and see what you all think about this.

AA just announced, beginning DEC 20, 2010. Anyone that uses a travel agency, or online booking company (Orbitz,Priceline ect.). to book any AA coded product. AA will bill that Travel Agency or Online booking company
$12.25 per segment fee. So a family of 4 going from DTW - LAX, They have to stop either in DFW or ORD going
out and coming back. That would come to $49.00 per ticket per person. For all 4 people that would be $196.00 add
to the basic airfare. They are claiming that it is costing them this much to keep this information on the GDS systems.
So, here is my thought on this.

1. 99% of the Agencies/online booking companies will stop carrying and booking all AA coded products. This
would include their AA Vacations and AA Cruises. Because the air is always done on AA.

2. If anyone is going to do business with AA then they will be handing this down to the consumer. I can tell
you as an Agency owner I will not be booking any AA products and If I have to book AA because a client
wants this carrier. I will be passing on this crazy charge.

AA is just getting to crazy. And it is all come about because AA and Orbitz along with Travelport are in
a content fight.

What does everyone else think?
Let me know

Chuck

10 replies: All unread, jump to last
 
User currently offlineaviationbuff08 From United States of America, joined Feb 2008, 346 posts, RR: 0
Reply 1, posted (3 years 10 months 1 week 3 days 23 hours ago) and read 4106 times:

Quoting dldtw1962 (Thread starter):
1. 99% of the Agencies/online booking companies will stop carrying and booking all AA coded products. This
would include their AA Vacations and AA Cruises. Because the air is always done on AA.



That is exactly what is going to happen, and AA will lose business to competing airlines.


User currently offlineB377 From United States of America, joined Apr 2005, 139 posts, RR: 0
Reply 2, posted (3 years 10 months 1 week 3 days 22 hours ago) and read 4019 times:

This is a fight over GDS fees and the increased cost that Travelport LP, which owns Worldspan and Galileo GDS systems, which increased segment fees to airlines. All the major US carriers are challenging this in the dockets section of the DOT.

See DOT-OST-2010-0140-2033.1.

AA is trying to move the major travel agencies over to its direct connect system that it wants them to use, and is a much cheaper distribution system.

It is trying to force Orbitz to use the AA direct connect program and Travelport LP is fighting because they want to keep the segment fees it charges AA for the service on through the GDS's.

AA is simply now saying these segment fees are outlandish and they will not pay them any longer. If Travel Agencies and Orbitz want to continue business with AA through the GDS's, Worldspan and Gaileo, they will have to pay for the segment fees.

See:
http://www.bizjournals.com/triangle/...om-canceling-Orbitz.html?ana=yfcpc

[Edited 2010-11-24 12:03:50]

User currently offlineenilria From Canada, joined Feb 2008, 7216 posts, RR: 13
Reply 3, posted (3 years 10 months 1 week 3 days 22 hours ago) and read 3956 times:

Quoting B377 (Reply 2):
AA is simply now saying these segment fees are outlandish and they will not pay them any longer.

They are outlandish.

Quoting B377 (Reply 2):
If Travel Agencies and Orbitz want to continue business with AA through the GDS's, Worldspan and Gaileo, they will have to pay for the segment fees.

Unfair.

I see both sides. Travel Agencies get their business ripped apart...and they provide a valuable service. Meanwhile, the GDS companies with tons of debt and little actual operating cost pillage the airlines for fees. I bet the marginal cost to the GDS of a booking is less than 2 cents. Let they charge 100 or 1000x that. What is the marginal cost of submitting this response through the internet? It's probably about the same.

The days of the GDS are going quickly. Expedia/Trav/Orbitz will all switch to something like direct connect soon. They hate the GDS as well.


User currently offlinecrosswinds21 From Netherlands, joined Jun 2009, 698 posts, RR: 0
Reply 4, posted (3 years 10 months 1 week 3 days 22 hours ago) and read 3956 times:

Quoting dldtw1962 (Thread starter):
1. 99% of the Agencies/online booking companies will stop carrying and booking all AA coded products. This
would include their AA Vacations and AA Cruises. Because the air is always done on AA.

2. If anyone is going to do business with AA then they will be handing this down to the consumer. I can tell
you as an Agency owner I will not be booking any AA products and If I have to book AA because a client
wants this carrier. I will be passing on this crazy charge.

Or, wouldn't another alternative be that agencies stop pulling AA invenotires from GDS and instead get them from AA directly? Therefore, then wouldn't this result in no cost to anyone?

Quoting dldtw1962 (Thread starter):
AA is just getting to crazy. And it is all come about because AA and Orbitz along with Travelport are in a content fight.

Not really. I don't know what the cost to AA is when someone books one of their flights through a travel agency, but if it really is in the vicinity of $10+ per segment, then that's completely absurd that they would have to pay that. That means that when someone books your typical $240, 4 segment, round trip AA flight through an agent, then AA has to pay $40 of that to a GDS, not to mention the additional $40 or so that are actually taxes which AA doesn't get to keep. So all in all, out of $240, AA would get $160. If this is really the case, then it's no wonder that they're looking to end this GDS nonsense.


User currently offlineStyle From United Kingdom, joined Aug 2006, 263 posts, RR: 0
Reply 5, posted (3 years 10 months 1 week 3 days 22 hours ago) and read 3924 times:

Quoting dldtw1962 (Thread starter):
1. 99% of the Agencies/online booking companies will stop carrying and booking all AA coded products. This
would include their AA Vacations
and AA Cruises. Because the air is always done on AA.

Is that 99% backed up by some reputable source or is it just your opinion?

Yet another move by an airline to pick up every last penny it can. No industry like the airline industry...


User currently offlinegonnagetbumpy From United States of America, joined May 2009, 45 posts, RR: 0
Reply 6, posted (3 years 10 months 1 week 3 days 21 hours ago) and read 3865 times:

Quoting Reply 5):
No industry like the airline industry...

Actually almost every industry is like the airline industry....trying to make a profit.


User currently offlineFWAERJ From United States of America, joined Jun 2006, 3756 posts, RR: 2
Reply 7, posted (3 years 10 months 1 week 3 days 20 hours ago) and read 3683 times:

Does a direct connection to AA (or another airline) cost travel agencies money to implement? And is it hard to set up for agents? I would think that it would only require a web browser (such as Internet Explorer or Firefox) and/or an easy-to-install dedicated software program for Windows (after all, not that many agencies use Macs), hence why it would be in the best interest of AA.

I wonder if travel agencies will do an AA boycott because of this. Eagle accounts for 25% of FWA pax, and they're about to start a 4th FWA-ORD. Yet I have a feeling that local agencies here in Fort Wayne will do one or more of these options.

1) switch pax to DL and UA from FWA; AA would be offered only if the pax wants to pay up the extra fee
2) only offer AA tickets to clients if they have the lowest fare, even after the fee OR if UA or DL don't serve a certain destination
3) bring in the Nerd Herd and directly connect their computers to AA
4) "leave FWA behIND" and encourage pax to book IND-only carriers like FL, US, and WN



"Did he really need the triple bypass? Or was it the miles?"
User currently offlineLAXintl From United States of America, joined May 2000, 25511 posts, RR: 50
Reply 8, posted (3 years 10 months 1 week 3 days 20 hours ago) and read 3613 times:

There is much more to this story then what the OPer states.

As B377 explains, this is very much about a larger industry debate regarding distribution cost.

Now that GDS systems have become big standalone businesses themselves and no longer airline subsidiaries they are increasingly ending up at odds with the airlines. GDS systems are trying to maximize revenues and have continued to raise fees, while airlines rightfully are looking to reduce their cost, not increase them.

Just happens AA is the more aggressive of the bunch and is getting much of the PR surrounding this debate, however much of the US and even global airline community has some skin in the outcome.

At the end of the day, airlines do have the right to manage by what means their products get distributed, and there are certainly alternative options for both the consumer and travel agent community to utilize than submitting to what some views as GDS blackmail.

At the end of the day, in my view the GDS systems will blink, as after all without content to sell they are nothing. They need the airlines even more than the airlines need them imo.



From the desert to the sea, to all of Southern California
User currently offlineB377 From United States of America, joined Apr 2005, 139 posts, RR: 0
Reply 9, posted (3 years 10 months 1 week 3 days 19 hours ago) and read 3545 times:

US Air has jumped into this issue, according to travel weekly, however, not as much in your face as AA has been.

http://travelweekly.com/article3_ektid224910.aspx


User currently offlinedldtw1962 From United States of America, joined May 2009, 393 posts, RR: 0
Reply 10, posted (3 years 10 months 1 week 3 days 15 hours ago) and read 3385 times:

They 99% figure is just my thinking. Also, the way we are taking it. If you book a flights on DL and one segment is on
AA Connection. The agency will have to pay for that one segment on AA. I just think this has all gotten out of hand. And as a result of this AA is going to lose even more money. And yes, we could go to their Website and book these
tickets with out any segment charges. However, I can tell you from experience that the airlines Web sites do not allways
the best flights, times, conections, are lower fares. I can on a daily bases find a cheaper fare on the GDS (Worldspan) then the airlines are giving me. So either way you look at it. The consumer is the one getting screwed in the end.

I do miss that days when airlines and agencies got along nicely and we worked together in making profites for the carrier.

Chuck


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