US buyers face flight surcharges

18 October 2006
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19 October 2006

Travel buyers in the US are being surcharged an average $2 a ticket by many travel management companies following the signing of new contracts between airlines and global distribution systems.

The agreements, which took effect on 1 September, provide significant "preferred supplier" discounts from the GDSs to their airline customers. If a TMC chooses not to book through the preferred supplier programmes, the big six US airlines are charging it $3.50 per flight segment. If a TMC does book through one of the programmes, the TMC pays $0.80 per segment to the GDS instead.

Most TMCs are choosing the latter option and passing the cost on to their clients in turn. Carlson Wagonlit Travel has calculated that the average flight itinerary consists of 2.5 segments and is therefore surcharging $2 per ticket. HRG said it will calculate a precise average per client. Some US travel managers say the move could cost them$1 million per year.

UK travel experts are uncertain whether buyers will eventually face similar charges here. If they do, the National Business Travel Association of the US urges travel managers to communicate the cost to senior executives and to treat distributions costs actively as a manageable expense.

SMoct2006

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