FORT WORTH, Texas - In a move that will make its popular Web fares more widely available to consumers while reducing its total distribution costs, American Airlines today announced its innovative new EveryFaresm program.
Under the terms of the new EveryFare program, American will provide traditional (non-Internet) travel agencies in the U.S. (including Puerto Rico and U.S. Virgin Islands) and Canada the option to access and sell its Web fares, which are low fares previously offered only via American’s own Web site, AA.com, and select low-cost distribution channels. In exchange for Web fare access, travel agencies will provide American with long-term distribution cost savings through a creative cost-sharing arrangement.
American today announced that TQ3 Maritz Travel Solutions and Corporate Travel Management Group (CTMG) have agreed to be launch travel agency partners for the EveryFare program.
The EveryFare program responds to the desire of corporate travel managers to gain access to Web fares, though they are not discountable, through the same travel agencies they use to manage their corporate travel. At the same time, the program responds to the desire of travel agencies to expand the range of services they offer to include Web fares.
“By joining our EveryFare program, travel agencies will bring added value to our mutual customers, offering a broader range of fares - including our popular Web fares - and do so in a manner consistent with American’s program to reduce the cost of selling our product,” said Donald J. Carty, Chairman and CEO of American Airlines. “Offering Web fares via the EveryFare program is one more way we’ve implemented our philosophy to offer Web fares only via low-cost distribution channels.”
American plans to make these Web Fares available for sale by any traditional “bricks and mortar” U.S. or Canadian travel agency that signs up for the EveryFare program, and thus becomes a long term, lower cost distribution channel.
The innovative EveryFare program provides these Web fares in exchange for effectively shifting the responsibility for the cost of global distribution system (GDS) booking fees from American Airlines to the travel agency. American initially gives travel agencies an allowance credit of approximately US$4 per flight coupon. Travel agents then pay to American an amount equal to their own GDS fees, based upon their own choice of GDS services and products.
The allowance paid agencies gradually declines during the term of the contract, to allow EveryFare program participants time to seek lower GDS fees. The result will be lower distribution costs for American on all fares distributed via participating EveryFare agencies.
“We want all our clients to be able to consider all the fares in the marketplace - including Web-only fares - to lower travel costs wherever possible”, said Jack O`Neill, president of TQ3 Maritz Travel Solutions. “This agreement and our close partnership with American Airlines helps our clients do that, lets us do it in a simple, straightforward manner, and ultimately gets some distribution costs out of the current cost model. This ground-breaking agreement will greatly benefit our (TQ3 and American) clients who are asking for Web fares.”
Later this year, agencies in the EveryFare program may have the option of booking directly through AA.com, and avoiding the GDS fee entirely. The agency would pay a lower fee than current GDS fees, but still receives the same allowance.
More information about this innovative program is available online at http://www.aa.com/everyfare or simply click on “Business & Agency Programs” on the AA.com homepage.
The new American Airlines EveryFaresm program gives customers access to its popular Web fares via participating traditional travel agencies. In addition, these agencies become lower-cost distribution channels for American to sell its product. Traditional (non-Internet) travel agencies in the U.S. (including Puerto Rico and U.S. Virgin Islands) and Canada that agree to the terms of the program are eligible to participate.
*An eligible traditional U.S. or Canadian travel agency agrees to a long-term (through Dec. 31, 2007) EveryFare program agreement with American Airlines.
*The travel agency participating in the EveryFare program gains the ability to offer their customers American’s low-priced Web fares through their Global Distribution System (GDS).
*The EveryFare program gives travel agencies incentive to help American lower its distribution cost, by effectively shifting the responsibility for the cost of reservation system fees charged by the GDS from AA to the travel agency.
*AA provides the participating travel agency a per-flight coupon allowance credit of approximately US$4 to offset most or all of the GDS booking fees.
*With access to popular Web fares, the participating travel agency should enjoy increased customer demand and potentially increased revenues to offset any GDS fees above the allowance.
*The EveryFare program gives travel agencies a financial incentive to seek lower GDS fees.
*In the future, AA expects that travel agencies may have the option of booking via AA.com, avoiding third-party GDS fee entirely and paying instead a lower fee than is currently available through GDSs today while still receiving the full allowance.
*The per-flight coupon allowance AA will pay participating travel agencies diminishes each year over the next five years, allowing the agencies time to achieve efficiencies and cost reductions in distribution technologies. The per-flight coupon allowance rates follow.