The Association of Canadian Travel Agencies fears the clash between American Airlines and Travelport could be "the tip of the iceberg," paving the way for further surcharges and causing damage to all GDS-carrier relationships.
The argument is fast becoming an "all-out confrontation" between travel agencies worldwide and AA with "dire effects" on travelers and the travel distribution system at large, said David McCaig, president of the Association of Canadian Travel Agencies.
McCaig fears other airlines could follow AA’s lead and institute charges on the use of Travelport’s GDSs (Galileo and Worldspan). Another possible scenario is that surcharges could be expanded to other major GDSs as airlines offset one of their major expenses.
"It’s easy to see that an AA victory would entice the rest of the carriers to adopt similar models returning air bookings to complete control by each airline and removing the competitive landscape displayed on a GDS. We would be thrown back in time when passengers were denied choice, convenience and comfort," said McCaig.
"Travel agencies would also be increasingly forced to use direct airline connections as surcharges levied through BSP (IATA’s Billing and Settlement Plan) become too expensive to maintain," said McCaig. The result is that agencies would become unable to optimize their GDS contractual levels.
Though ACTA said it believes the "real intention" behind the AA surcharge is to "punish" Travelport for launching a lawsuit against the airline when it tried to deny its flight information to online travel agency Orbitz (48% owned by Travelport), the airline’s short-term goal is to dissuade travel agencies from using Travelport’s GDSs and to use American’s Direct Connect booking system, said McCaig.
"There is a growing suspicion throughout the industry that the long-term goal could be to impose similar surcharges on all GDSs to detour many travel agencies to Direct Connect."
Meanwhile, agency associations worldwide have slammed IATA’s decision to allow American to use the BSP (the worldwide system by which airlines settle their air travel charges) to collect the surcharge, stating that it contravenes IATA regulations.
According to IATA’s Resolution 850m, the BSP can be used to levy charges against agencies only when agencies have been consulted and should only be used in reference to actual ticketing process.
As a result, ACTA is calling on all agencies to dispute charges levied by AA through the BSP on the basis that "no credible" agency group has been consulted by AA on the use of the BSP — a violation of IATA’s resolution 850m.
Starting today, American is issuing surcharge invoices for AA flights booked on Travelport systems. Travelport last week responded saying it plans to automatically include the surcharge in the total paid at the time of ticketing, resulting in the consumer automatically paying the surcharge upon ticket purchase.
The Association of Retail Travel Agents says it believes Travelport may be exceeding its authority by using its systems to force agents to pass the surcharge on to consumers.
"The actions of Travelport may put its IATA certification as an authorized GDS provider at risk, exposing users of Travelport GDSs to the possibility that certification may be removed if AA and other concerned carriers prevail upon IATA to sanction Travelport for any alleged intentional and unauthorized fare and ticketing manipulation," said ARTA.
Instead, ARTA is urging Travelport to absorb the surcharge and cease any attempt to bias its system against AA and consumers.
"Travelport can certainly afford to defend both agent and consumer by refunding any agent debit memo paid by an agent" given that the surcharge imposed by AA is "only a fraction of the huge increase allegedly imposed by Travelport on AA," ARTA said.