Travel buyers blast airline unbundling

24 November 2011

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24 November 2011 | Adam Leach

Travel buyers believe airlines are acting unfairly by trying to avoid putting ancillary charges for baggage and other items through business travel systems.

A survey by the Global Business Travel Association (GBTA) found that 85 per cent of its members believe airlines are acting contrary to fair competition by unbundling certain services or selling them directly through their own systems.

Unbundling services, such as baggage charges or car hire, has become popular among major international airlines, which have followed the approach popularised by low-cost carriers.

According to Paul Tilstone, managing director at GBTA, this development should have been a positive development for procurement, but in practice has not been.

“For a long time, procurement has called for greater transparency to enable it to pay for the things that are of value to it and not pay for the things that aren’t,” he told SM. “The reality is that as they unbundle these items, they’re not thinking about the existing capabilities of the global distribution systems (GDS).”

A GDS is a system that buyers use to purchase tickets from a variety of airlines.

Tilstone said there is a view that airlines are deliberately trying to separate ancillary fees from the GDS and travel management companies in order to get a direct line to the traveller by getting them to pay for such items at the point of check-in on a credit card.

“That gives them direct contact with that individual and that money, and even though it is paid by a credit card, it effectively disappears off the central register of expenditure the corporation is building through its GDS and travel management company.”

Tilstone has raised the issue of unbundling with the European Commission this month. He said this and other issues raised by GBTA members would form the basis for a new manifesto for the organisation, to be published early next year.

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