The ongoing saga of airlines not wanting to pay current fees to sell their tickets through third parties, and not happy with how third parties market upsell options to consumers, went to the next level today.
Two years ago Lufthansa announced a 16 euro fee for bookings made outside of Lufthansa, Austrian Airlines, Brussels Airlines and Swiss International Airlines channels such as computer reservation systems Sabre, Amadeus, and Travelport.
Other channels that are exempt include its own website, airline sales offices and call centres, as well as the following channels:
- NDC direct connection
- NDC via an IT service provider/aggregator
- Self-booking tools connected to BA or IB via NDC
- IAG Booking Portal (to be available shortly)
- Other travel intermediaries, including GDS, that adopt NDC based connections in the future
The fee applies to British Airways and Iberia. It does not apply to Aer Lingus and Vueling.
This makes British Airways tickets more expensive (and often more expensive than competitors) when shopping through online travel agencies. At the same time it makes online travel agencies more expensive than buying from British Airways directly. It’s a gamble that may cost BA some business, save some costs, and attempts to force third parties to adopt less expensive technology that also pushes customers to spend more on the airline.
As Willie Walsh, CEO of British Airways parent IAG, presented to investors in the fall:
British Airways already faces significant challenges with Brexit inching forward and increasingly inferior products. They’ve weathered well financially so far. That Lufthansa hasn’t backed off the move no doubt gave British Airways the confidence to pull the trigger themselves.