Following the decision by British Airways (BA) to apply a per sector distribution fee to all bookings made by travel agencies in the UK, Amadeus & BA have come to an agreement, subject to contract, that responds to the carrier’s concerns on distribution costs and ensures full content through Amadeus. Within the framework of its value-based pricing policy for airlines, announced in November 2003, where Amadeus stated it will pilot low fare programmes during 2004, Amadeus will introduce a new agency Low Fare Content product in the UK which, effective 1 March 2004, will also enable Amadeus to continue to distribute all BA fares, including web fares, without the £3 per sector distribution fee announced recently by the airline.
Through the Low Fare Content product, UK travel agents connected to Amadeus will access all BA fares without the announced surcharge on an opt-in basis. As contribution towards ensuring continued availability of vital fares on the GDS for travellers, Amadeus will require agents that opt in - for each BA sector booked in the GDS in only 4 specific low fare classes, and only for domestic or intra-European routes - to pay a £0.95 charge.
Independently, Amadeus will continue to pay incentives to its UK connected travel agencies as contemplated in existing agreements, regardless of whether the travel agencies opt in or not, to the new Low Fare Content product.
UK travel agents that decide not to subscribe to the Low Fare Content product will still get access to BA’s full inventory of available seats but will pay BA the previously announced £3 per sector distribution fee for all bookings made in the UK.
“Under this agreement, we demonstrate the value that Amadeus brings to both sides of the distribution chain,” commented David Jones, Amadeus’ Executive Vice President, Commercial. “We have provided a solution to BA’s business needs whilst ensuring full content for our UK travel agencies.”
Tiffany Hall, British Airways head of UK & Ireland Sales and Marketing said, “Our business plan to 2006 focuses on cost reduction and the reduction of distribution costs is a key part of this plan. We have been working closely with the Global Distribution Systems to become more efficient in the way we distribute our fares and are very pleased to have found a solution with Amadeus, who are playing a strategic role in helping us transform our business.”
Productivity programme associated with the low fare content product
Directly linked to the British Airways Low Fare Content product, Amadeus is also introducing a new productivity programme. Travel agents that subscribe will automatically get a £0.95 credit for each car, hotel or cruise booking made on Amadeus. The programme applies to bookings for which agents do not otherwise receive an incentive and for which Amadeus receives a booking fee. The credit will not exceed the number of low fare bookings made by the agent on the stipulated four BA low fare classes.