BA and Amex end dispute and plan joint card launch

3 August 2005
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04 August 2005 | Amon Cohen

American Express and British Airways have settled a three-year row that forced purchasers to pay the processing fee on certain fares booked with payment cards.

Under the truce, BA will resume paying merchant fees from October after Amex agreed to cut its rates.

The airline will also pay the fees for other card companies.

Larger organisations with net (upfront discount) negotiated deals with BA will make direct purchasing and indirect process savings as a result of the change.

Ken Gledhill, AstraZeneca UK travel manager, welcomed the news: "It simplifies what became a complex area when card charges were separated out."

Kevin Watts, global contracts manager for the British Council, agreed. "This will be a saving for firms that buy a lot of corporate net fares."

Improved relations will also lead to a jointly branded corporate card, set to be launched later this year.

Aimed at the 13,000 smaller companies in BA's OnBusiness benefits programme, the card will award frequent-flyer mileage to cardholders, as well as points to the corporate client.

The card will also provide corporate clients with online management information that can be used to track travel and entertainment spend.

The original row started when BA said it would no longer cover the merchant fees for corporate net fare payments, which led to the two travel giants slugging it out in the courts.

Prior to the disagreement, fees averaged about 2 per cent of the fare, with Amex thought to charge around 2.8 per cent.

BA's decision left corporate clients' travel management companies footing the bill, which they passed on to customers.

It also led to BA and Amex launching counter-lawsuits for claimed breach of contract over the dispute in 2002. They dropped the legal actions in 2004.

SMaug2005

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