British Airways and Iberia’s costs of third-party distribution could rise from November when the IAG-owned airlines impose an £8 charge on all bookings through global distribution systems (GDSs).
That is the view of Travelport president and chief executive Gordon Wilson, who dismissed a lot of technology talk in the industry as “nonsense”.
Wilson said: “A lot of talk in this area does not match the technology – it doesn’t match the end-to-end process. There is a lot of nonsense talked in the industry.”
He said: “The current deal BA has with us is an extraordinarily good deal. If they want to do away with it, that is up to them. Come November 1, they will lose the advantages they have.”
BA and other full-service carriers currently rely on GDSs such as Travelport’s for bookings outside their home markets.
The only way for travel agents including OTAs to avoid the new fee will be to book direct with the airlines or pay to connect to their systems via an application programme interface (API).
Wilson said: “We are in 180 countries and Delta Air Lines has just renewed a multi-year full content agreement with us with no booking charge, nothing.
“The value we bring to airlines like Delta is that they can sell in 179 countries other than their own. Who else is going to do this [for the airlines]?”
He said: “I’ve not found anything BA is doing or wants to do with an API that it could not do with Travelport now.
“We are in dialogue. It’s not a combative relationship. [But] there are a lot of unanswered questions. I’m still trying to work out what they want to do that they can’t.”
German carrier Lufthansa introduced a GDS booking fee, or Distribution Cost Charge, of €16 in September 2015. It reported its costs of GDS distribution rose by €12 million in the following year.
Travelport reported a 4% rise in revenue year on year to $1.26 billion in the six months to June, with 67% of air transactions in carriers’ overseas markets.
Total transaction value for the six months was $41.6 billion, up 2% on the first half of 2016.
The company reported an 8% increase in operating profit to $315 million for the half year, while seeing a 4% fall in sector bookings in the Middle East and Africa and a 5% decline in the three months to June.
Wilson said: “The Middle East and Africa was not helped by the laptop and travel bans, and the embargo by Arab countries on Qatar. That has taken some momentum out of the market.
“Europe has been a mixed bag. The UK market has been a bit soft. Elections always seem to have a dampening effect.
“Asia is a success story for us, particularly in India and Indonesia. We did well in every market except South Korea.”