Carlson Wagonlit Travel this week began communicating to clients it would charge $2 per airline ticket in an effort to offset the costs generated by global distribution systems' opt-in programs, which begin Sept. 1. The only transactions exempt from the fee are those made through the travel management company's Symphonie direct channel—which would incur no fee at all—or those booked on American Airlines through the Sabre GDS, which would incur a $3.50 per-segment fee imposed by the carrier. CWT franchises will make their own assessment of potential fees.
"We did the math on what it would cost across our client portfolio and figured out that $2 was the number, and that's certainly not a number that enriches CWT," said Mike Koetting, executive vice president of CWT. "It's a pass-through calculation—a broad average across our client portfolio averaging the average number of segments we had per air transaction. The $2 per air transaction is the amount that we believe, for simplicity's sake, is what the cost pass-through amounts to."
Some clients of CWT are "frustrated" by the travel management company's decision. "It's all a shell game," said one CWT client on the condition of anonymity. "Instead of just raising a ticket price, they're sticking it to their top buyers."
Koetting, however, said most clients have understood. "They're certainly not happy about it—neither are we, for that matter," he said. "There's a great deal of democracy in the way that we're passing the cost through. We incur the cost on every one of our segments, and therefore we have no choice but to pass it through on every one of our segments."
The situation began in June when Sabre Travel Network introduced an optional fee-based program giving its global distribution subscribers access to full airfare content and immunity from airline service charges
(BTN, June 19). Other GDSs soon followed, shifting the cost structure of corporate travel distribution to travel agencies and their customers to pay a larger portion of the bill. So far, CWT is the first travel management company to initiate such a charge, but Koetting expects others will follow suit.
"I believe every other agency is subject to similar GDS economics," he said, "and I believe other agencies will arrive at the same conclusion as CWT."