Travel buyers are poised to enjoy some handsome fare reductions as a result of tariff construction changes introduced Jan. 15 by the International Air Transport Association.
The removal of international sales indicator codes
(BTN, Sept. 20, 2004) means travel agents no longer will need to show the country in which they purchased a ticket, only where it was issued. Another significant change is the removal of the Directional Minimum Check, which will allow agents to book two one-way tickets even if it is cheaper than a round-trip.
IATA has said it expects to see an increase in split ticketing following the changes. It should be easier to create arbitrage-type savings by buying at least part of the journey in countries with weaker currencies. "Business travelers flying a in a premium cabin on fully flexible tickets will make substantial savings," said Monique Staats, assistant director for conference services at IATA.
Few clients interviewed by BTN seemed aware of the new regulations or the likely impact on their budgets. Agents were more conscious of the changes but were unsure how they will play out until they switch on their global distribution system sets this week to book itineraries.
However, Chris Turnbull, senior partner with London-based Scholefield Turnbull & Partners, which specializes in booking travel for board-level executives, expects his customers to be major winners. "We love the new rules," he said. "Inter-continental premium-cabin travelers to Africa, the Far East and South America will benefit considerably." Staats thinks passengers bound for the United States will also do well owing to the present weakness of the U.S. dollar.
One route on which Turnbull anticipates savings is London-Lagos. As BTN went to press, it cost US$6,567 return in business class, compared with $2,220 for Lagos-London return. "We will have to see if we can now book a lower fare but until it is confirmed in the GDS, we cannot be sure," he said. "Airlines may put up their fares in weaker markets if they see their revenue being diluted."
U.K.-based passengers are likely to be among the biggest beneficiaries of the rule changes because they pay more per mile in business class, especially on long-haul routes, than almost any other country in the world.
Turnbull also believes there will be lower fares for travelers making changes to multi-sector itineraries that include legs to and from the United States. Re-calculated fares will now be on a more favorable basis.
Carlson Wagonlit Travel, which has a broader customer profile than Scholefield Turnbull, is slightly less exultant about the IATA restructure but is confident some of its clients will gain. "A revolution is not predicted on 15 January, but each corporation may find some real nuggets on certain routes and genuine opportunities," the agency said in a statement.
Buyers are waiting to see what their potential savings will be but so far have given the developments a provisional welcome. "This will make buying tickets on some routes much easier and more flexible for us," said Yves Galimidi, Belgium-based manager for InterIKEA Group.
Kevin Watts, chairman of the Business Travel Liaison Group, which represents two dozen of the largest corporate travel buyers in the United Kingdom, also was supportive. "This is a welcome relaxation of what were increasingly archaic rules," said Watts, who is also the travel manager for the British Council.
Staats agreed that changing the rules was necessary. "In general, the removal of the international sales indicators is a simplification of the rules," she said. "The growth of bookings over the Internet meant airlines could no longer determine where a passenger was located, so we decided that we would develop a new set of rules for all fares."