Air France-KLM will implement GDS surcharge

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Air France-KLM will begin assessing a surcharge on GDS bookings on April 1, joining two other large airlines groups in Europe, Lufthansa and IAG.

The fee will be 11 euros (about $12.80) for a one-way trip.

In a presentation released online as part of its third-quarter earnings announcement on Friday, Air France-KLM said that the fee will cover the cost difference between GDS and direct sales.

"GDSs are a key component of Air France-KLM distribution," the airline group said. "However, their model represents higher costs than other options and comes with more constraints."

IAG's British Airways and Iberia implemented their GDS fee on Wednesday, charging $10 in most cases for a one-way trip. Lufthansa began charging an $18 GDS surcharge in September 2015.

Air France-KLM said that its goal is to take back control of the offers in all its sales channels by embracing IATA's New Distribution Capability (NDC), the XML-based standard that lays the groundwork for airlines to sell all of their products, including ancillaries, through travel agencies.

The airline group said that using NDC would allow it to create more personalized sales offerings as well as dynamically built product bundles and to display those offerings in a richer, more illustrative format.

Industry watchers had widely expected Air France-KLM to implement a distribution charge since IAG made its surcharge announcement in May.

U.S. airlines have thus far not followed the lead of their European counterparts. In June, American took a different tack, offering an incentive of $2 per segment to agencies if they book through an NDC-supported direct connection with the carrier.

ASTA expressed skepticism about the new surcharge. 

"As with the Lufthansa and IAG/BA GDS surcharges, ASTA's position is that while the promised creation of a travel agency portal is a positive sign, this move will present complications to our member companies' business operations," ASTA executive vice president of advocacy Eben Peck said. "This factor coupled with the presumed intent to make it difficult for agents to comparison shop on behalf of clients only disservices the end traveler."

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