Galileo Aside, BA GDS Charges Loom

After signing a three-year content deal with Galileo, British Airways this month warned that if it doesn't reach new terms on expired distribution contracts with Amadeus, Sabre and Worldspan by April 10, it will begin surcharging U.K. clients £3 per segment. Elsewhere in Europe, the practice of surcharging global distribution system bookings is coming under fire, as demonstrated by the European travel buyer response to plans by SN Brussels Airlines to impose such fees.

British Airways and Galileo's three-year content agreement, through which BA will distribute "fares and inventory" to the global distribution system's subscribers, forces subscribers into an opt-in program to avoid surcharges. The parties said the agreement goes live on April 10.

BA executive vice president of the Americas Robin Hayes this month told BTN that the carrier began paying GDS rack rates when content deals expired late last month. BA has yet to levy surcharges on customers, but if deals aren't struck, a surcharge is likely for those in the United Kingdom.

"At the moment, we haven't passed through the cost," Hayes said. "We have said in the U.K. that from April 10, if agents haven't signed up, there will be a surcharge." In regard to U.S. surcharge and content implications, Hayes said, "We're still reviewing those options."

Galileo would only say about its opt-in program that it "offers travel agents in the U.K. and Ireland the opportunity to access all of British Airways' fare content that is made publicly available through the airline's sales channels, including ba.com." Galileo noted that the program is the continuation of an agency opt-in program launched in 2004. "More details of the program will be made available from Galileo in due course," Galileo said in a statement. Hayes said the opt-in program likely would follow the model launched in the United States last year.

Although Galileo parent Travelport last year agreed to acquire Worldspan, British Airways is seeking deals with both global distribution systems, as the acquisition has yet to close and integration has not commenced, Hayes noted.

"I'm confident that we will get deals with at least two or three of the GDSs fairly quickly," Hayes said. "I'm hopeful that we'll get another one concluded soon."

European buyers have not embraced the practice of surcharging. Brussels Airlines last month told travel buyers of a decision to begin imposing a E5 per-segment surcharge on GDS booking on some of its fares, irking the Belgian Association of Corporate Travel Management. Rallied by BATM, Europe-based buyers from such companies as Canon Europe, Toyota Motor Europe, Pfizer, 3M, Ikea Group and Johnson & Johnson expressed dismay over the new charges.

Amid the uproar, the carrier "changed its position to lower this surcharge from E5 per segment to E2.5," BATM president Nora Buysschaert wrote in a memo to members. "This brings us back to their original position which they implemented in 2006."

The move, however, did not quell BATM. "BATM is not questioning the magnitude of a E2.5 versus the E5 surcharge proposed on GDS bookings but rather the overall principle that SN wants to establish in the market: fare discrimination between the GDS booked segments and the ones booked through their Web site." BATM is seeking parity in content and price from all channels.

BATM said the issue transcends a single carrier, and should be embraced by travel buyers worldwide.

"Accepting the principle of different pricing, as implemented by SN, opens the door for any airline to adopt a similar pricing scheme, thus creating an amalgam of price increases and confusion, making the travel marketplace less comparable and less transparent," BATM said in a statement. "Today, not one IATA airline, except SN, adopts this practice and this is how it should remain."