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AA charges a fee to book with them

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Many moons ago the airlines paid everyone a fee when they made a booking through an agency or GDS. Now it seems we have to pay them to give them our money.

American Airlines introducing Booking Source Premium Surcharge to select GDS system

Posted: 23 Nov 2010 11:06 PM PST

American Airlines has announced the introduction of “Booking Source Premium”, a surcharge that will be assessed on per segment basis for all “AA”-coded flights.

The surcharge is to be in effect from 20DEC10.

Travel agents using Travelport Global Distribution Systems for reservation, which includes Galileo or Worldspan, will be charged USD12.25 PER SEGMENT, through weekly or monthly debit memos.

Although this is charged to the travel agents/agencies, it is unknown whether this new surcharge will be passed on to travelers. This may be vary on individual agencies.

The oneWorld member cites recent significant increase in booking fees paid to Travelport GDS, in particular in markets outside the US, making it significantly more expensive than other GDS platforms.

Q&As about the surcharge can be found here (PDF document).

http://www.aa.com/content/images/agency ... ium_QA.pdf

Travelers book directly with AA or with agencies not using those systems mentioned above are not affected.

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November 23rd, 2010 by admin No Comments

A state court judge in Illinois has stepped in to temporarily block American Airlines from pulling its flight listings from the Orbitz online travel agency.

American notified Orbitz that it could remove its listings on Dec. 1 in a dispute over where Orbitz gets its information on the airline’s flights and prices.

Travelport Ltd., which controls Orbitz, asked for and won a temporary injunction against American.

A spokeswoman for American said Monday that Friday’s ruling was not a final decision but only a pause designed to give the court and the two companies time to consider the evidence.

American’s Mary Sanderson said the airline was confident that the court would eventually rule that American can end its relationship with Orbitz.

Orbitz did not immediately respond to messages for comment.

American wants travel agencies to get information about flights and prices directly from the airline and not from middlemen called global distribution systems, or GDSs.

Those systems charge airlines when consumers search for a particular flight or book a flight, and airlines are eager to reduce their distribution costs. Orbitz claims American’s move would limit consumers’ ability to compare airline prices.

Travelport, the privately held company that controls Orbitz Worldwide Inc., also owns the Worldspan and Galileo GDSs.

In trading Monday, Orbitz shares rose 5 cents to $5.23 while shares of American parent AMR Corp. fell 2 cents to $8.22.

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These spats between AA and the GDS's are too convoluted to follow.

AA blasts Travelport's plan to include fee in GDS displays

By: Natalia Thomson

December 17, 2010

American Airlines says Travelport’s move to include the airline’s proposed surcharge on non-U.S. and non-Caribbean travel agencies in GDS fare displays and quotes is a deliberate attempt to mislead agents and customers.

Travelport, owner of the Galileo and Worldspan reservation systems, revealed its plan on Thursday in a letter to travel agents.

"This deceptive practice falsely inflates the base fares for American Airlines flights, discriminating against American Airlines fares and deliberately misleading agents and consumers into believing that there are fewer choices available for low-cost flights," said the airline in a statement.

The airline is concerned that by "hiding" the surcharge (American is calling the surcharge a "booking source premium") in the base fare, intermediaries processing AA tickets are asking customers to bear some portion or all of the intermediary’s costs.

AA says the surcharge is not a passenger fee and should not be portrayed as such.

"It is categorically not part of the fare for air transportation, nor is it related to any other kind of service rendered to the passenger by American or any other charge from American that in any way a passenger can be required to pay in the name of American," said the airline.

AA asserts that by embedding the booking surcharge into the base fare, Travelport’s action is "patently misleading" and "strikes a blow" against transparency for air travel.

"Travelport is using its subscribing agents worldwide as vehicles for retaliation against an airline that is looking for better ways of interacting with the agency community," American said.

Moreover, AA is criticizing Travelport for "inaccurately" telling agents that the airline acted on its own in implementing the surcharge.

"The booking surcharge for American flights was implemented only after Travelport arbitrarily increased booking fees for flights on American Airlines booked through Galileo and Worldspan," said the airline.

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This issue is getting bigger

Canadian group: Surcharge issue puts agent distribution in peril

By: Natalia Thomson

December 20, 2010

Related stories

• AA blasts Travelport's plan to include fee in GDS displays

• Travelport to include AA surcharge in fare displays of non-U.S. agents

• American Airlines to charge Travelport agents outside U.S.

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.

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American Airlines stops selling tickets through Orbitz; could make fare comparisons tougher

On Tuesday December 21, 2010, 9:16 pm EST

By Joshua Freed, The Associated Press

American Airlines pulled its flights from the Orbitz travel website on Tuesday in a dispute that could eventually affect the way travellers buy airplane tickets online.

The airline said its tickets sold previously on Orbitz are still valid. And American Airlines tickets can still be bought at the airline's own website as well as other travel websites. American pulled its tickets from the Orbitz for Business site as well.

The dispute is the latest sign of strains between airlines and the companies that sell airline tickets, including online sellers like Orbitz.

Airlines have traditionally paid sellers a commission. American also pays fees to the global distribution companies that provide the flight information.

Now, American wants Orbitz to get that flight information directly from the airline, cutting out the global distribution systems. American has said that will reduce costs and also allow it to make more personalized offers to customers such as hotels and car rentals.

The global distribution systems have not moved as fast as they could have to upgrade their technology, but American's move with Orbitz is "rather severe," said Henry Harteveldt, a travel analyst for Forrester Research. "It seems like they want to scorch the earth."

He predicted that travellers who want to fly on American will seek out its tickets on the airline's website. Travelers who don't know what happened with Orbitz, or don't care which airline they fly, are unlikely to notice American's absence from Orbitz, he said.

Traveller advocates have said American's move will make it harder to comparison shop.

"There is profit in confusion, there is profit in fragmentation of all the fares and the fees so consumers can't comparison shop," said Kevin Mitchell, chairman of the Business Travel Coalition, which represents corporate travel buyers.

He said airlines ultimately would like to flip the current financial arrangement around and have travel agents pay them for access to flight information, rather than American paying every time someone else sells a ticket on one of its flights.

American's vice-president for sales, Derek DeCross, said in a statement that the airline needs to be "free to customize its product offerings to improve the customer experience as well as distribute its products in a way that does not result in unnecessary costs."

American had threatened to pull out of Orbitz on Dec. 1. But Orbitz got a state court judge in Chicago to block the threat temporarily. It made its move on Tuesday shortly after judge Martin S. Agran declined to issue an injunction. Agran ruled that any breach of contract can be sorted out with a lawsuit later.

The request to block American was brought by privately held Travelport Ltd., which owns 48 per cent of Orbitz. It also runs two of the biggest so-called global distribution systems, Galileo and Worldspan. American spokesman Ryan Mikolasik said it has been negotiating with other online ticket sellers. The Orbitz negotiation was made more difficult because of Travelport's involvement as owner of the two global distribution systems, he said.

Orbitz Worldwide Inc. called American's decision "unfortunate" and said it still offers flights from more than 400 airlines worldwide and would continue to seek a way to sell American tickets, too. It said American Airlines tickets add-ons like rental cars and hotel rooms added up to about 5 per cent of the company's revenue for the nine months that ended Sept. 30. It said it believes that any American Airlines tickets it loses will be replaced by tickets on other airlines.

Shares of American parent AMR Corp. rose 14 cents to close at $8.05. Orbitz shares rose 22 cents, or 3.5 per cent, to close at $6.44, but then fell 16 cents, or 2.5 per cent, to $6.28 in aftermarket trading.

Also Tuesday, Delta Air Lines Inc. said it would stop selling tickets through three smaller travel websites, CheapOAir.com, OneTravel.com, and BookIt.com effective on Dec. 17.

Last week a Delta executive told analysts that some ticket venues have more value than others. The airline wants "as direct a relationship and channel to our best customers as we can," said Glenn Hauenstein, Delta's executive vice-president for network planning, revenue management, and marketing. He said he's aiming for Delta's own website to be more like an Apple store and suggested that other travel websites are more like Best Buy, with similar products, but a different customer experience, he said.


Freed reported from Minneapolis. AP Airlines Writer David Koenig in Dallas contributed to this report.

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When I started this thread I thought that there was a continuing story here but then the other day I had a hard time realizing what American Airlines was after.

Now it is apparent that this is another salvo in the continuing war between the airlines and the distribution channels.

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Expedia pulls American Airlines fares from initial listings

By: Jerry Limone

December 23, 2010

American Airlines’ removal of fares from Orbitz has prompted Expedia, the largest online travel agency, to stop listing American fares in its initial search results. Users have to make an extra click to uncover AA fares.

"As of yesterday we have adjusted the way that American Airlines’ fares are displayed on our sites," Expedia said Thursday in a statement. "This has been done in light of both American Airlines’ recent decision to prevent Orbitz from selling its inventory and a possible disruption in Expedia’s ability to sell American Airlines tickets when our contract with American Airlines expires."

Expedia also criticized AA’s direct-connect distribution model.

"American Airlines has shown it only intends to do business with travel agencies through a new model that is anti-consumer and anti-choice," said Expedia. "We believe American Airlines’ proposed direct-connect model will result in higher costs and reduced transparency for consumers, making it difficult to compare AA ticket prices and options with offerings by other airlines.

"American Airlines’ direct-connect model is of questionable, if any, benefit to travelers, costly to build and maintain and would compromise travel agents' ability to provide travelers with the best selection. We cannot support efforts that we believe are fundamentally bad for travelers."

American Airlines spokesman Ryan Mikolasik called the action "discriminatory" and "unwarranted."

"This is especially considering that American has taken no action against Expedia and continues to operate in good faith with Expedia," Mikolasik said.

Mikolasik said American would explore its options to "correct" the situation

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Court stops Sabre from biasing American Airlines fares

By: Jeri Clausing

January 10, 2011

American Airlines won a temporary restraining order Monday barring Sabre from biasing its listing of American Airlines flights in its GDS.

The order was granted after the airline filed a lawsuit in Tarrant County, Texas, claiming the actions taken by Sabre last week violate agreements between the two parties and harm American, the travel agent community and the traveling public.

"We are gratified that after a contested hearing, the court has granted American’s request for interim relief, to be in effect until the court considers American’s request for longer-term relief," American said in a statement.

The airline is in the midst of a growing dispute with online travel agencies and GDSs over American's attempts to change its distribution model.

American said the court’s order prohibits Sabre from "continuing its recently announced practice of intentionally making it difficult for American’s agents and customers from finding and purchasing American services in the Sabre global distribution system. American intends to vigorously pursue its litigation against Sabre, including seeking damages for other violations of our agreements."

The dispute began when American tried to force Orbitz to use its Direct Connect system. According to OTAs and GDSs, the new system will reduce segment fees and incentives, and reduce transparency of search results.

American pulled fares from Orbitz on Dec. 21. Expedia soon after joined the fray, burying AA fares on Expedia.com then pulling all of American’s content on Jan. 1.

Last week, the stakes escalated substantially when Sabre joined the battle against American, downgrading the airline's listings. Sabre also revoked American’s segment fee discounts and stated an intent to renegotiate its contract with American or terminate it.

Sabre said it will vigorously defend its actions.

"Sabre is confident that our actions are well within our contractual rights, and we will aggressively defend against American Airlines’ baseless claims to the contrary," said Nancy St. Pierre, Sabre spokeswoman. "We are confident that the court will affirm Sabre’s contractual right to protect our customers’ interests and support airlines that value transparent and efficient comparison shopping."

The court’s decision to grant the temporary restraining order was applauded by the Association of Retail Travel Agents.

"This is good news indeed for all Sabre subscribers and assures that AA content will continue to be accessible efficiently and without obstacle, said Sally Watkins, ARTA's vice chairwoman.

Bruce Bishins, ARTA Canada's president, said Sabre was "mixing itself into a dispute in which it had no involvement other than to backstop support for other GDSs which moved against AA. The end result, as we predicted, would be that travel agents suffer as a result of GDSs making AA data more difficult to find."

Amadeus has not entered the fray but said it was reviewing its airline contracts in light of the dispute over Direct Connect.

"The 'direct connect' model only promotes fragmentation, raises costs and creates inefficiencies across the travel industry distribution chain," Amadeus said in a statement. "And for travelers, a direct-connect approach will result in higher fares, fewer options and the elimination of true transparency in their air travel."

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