Issues & Trends – February 2011
Despite American Airlines backdown agents concerned about ADM
WHILE the confrontation between Travelport and American Airlines (travelBulletin, December) has been at least temporarily resolved with a backdown by the carrier, travel agents remained concerned at the AA tactic of attempting to recover fees by issuing agents with ADMs (Agent Debit Memorandums).
AA’s announcement that it has dropped plans to collect a booking source premium charge on bookings made through Galileo GDSs (Galileo and Worldspan) blasted Travelport with whom it has been locked in an acrimonious dispute over the availability of fares on Travelport’s online travel agency Orbitz.
In Australia AA’s booking source premium charges were to be $US11.75 per segment to be collected from agents post-transaction by ADM.
The move provoked widespread criticism among agents, notably by Flight Centre chief executive Graham (Skroo) Turner who warned AA that charging agents after the booking would create considerable ill feeling and that AA would lose business to other airlines offering their fares through GDSs.
However Travelport proposed to display the AA surcharge as a non-standard tax and at the 11th hour the airline abandoned the fee.
AA’s statement attempted to put the blame for the situation on Travelport. It argued that the fee was not one imposed on customers but one being charged only to travel agents using Travelport GDSs.
According to AA, it was Travelport that had “created tremendous confusion in the market and hurt American, our travel agency partners and our customers”.
It was a statement that did not resonate with travel agents who had reacted with concern to the prospect of charges being collected by ADMs.
Even Sabre, a fierce rival of Travelport, supported its competitor in its dispute with AA. Said Sabre Travel Network senior vice president Chris Kroeger: “We oppose American’s efforts to impose a costly and unproven system on travel agents and travellers.
“We strongly agree with the many industry and consumer groups who believe American’s actions will make it much harder and more costly for agents and consumers to easily comparison shop among airlines, which will result in increased prices for consumers.”
Kroeger’s statement echoed that made earlier by Turner. “This (AA’s action) will create confusing scenarios for customers and for travel agents who both want easy access to the full range of airfare choices,” said the Flight Centre chief.
Speaking after the AA backdown, AFTA chief executive Jay Westbury said the federation remained very concerned by the airline’s attempt to use ADMs for collecting selective fare surcharges.
He noted that AA’s statement warned “we have not yet resolved our disputes with Travelport” but, even beyond this, Westbury said AFTA wanted to establish beyond doubt the principle that it was unacceptable for any airline to use ADMs in the way AA had proposed.
He said AFTA would be working in conjunction with the World Travel Agents Association Alliance (WTAAA) to press this principle with individual airlines and IATA.