GDSs make no promises on fees
WTM Special Report: Under fierce criticism over the level of their booking fees, GDSs said they were under review but fell short of promising a drop in fees.
Speaking on the first day of the EyeForTravel conference at World Travel Market, representatives from both Amadeus and Sabre admitted that their fees were widely regarded by airlines as too high, but argued that the fees were justified by the level of service offered.
In a presentation, Monarch Scheduled managing director Tim Jeans said: “When I got to Monarch about a year ago GDS useage was dropping like a stone, at around 60 per cent a year. It has now stabilised at about 6 per cent of our tickets being distributed through GDSs.”
Jeans said the carrier continues to use GDSs to get access to markets it couldn’t otherwise reach, such as Spain and Portugal, and to get access to online intermediaries like Expedia and Lastminute, or consolidators like Gold Medal. But despite these benefits of GDS affiliation, Jeans said fees were too high.
“We will be gone from two of the four GDSs in the future because we must remove some of these GDS costs.”
Speaking in defence of GDSs, Amadeus vice president multinational customer group, Gillian Gibson said: “I am convinced that airlines will continue to use GDSs because of the service we offer.”
“It’s largely a historical view [that GDS fees are too high] because there has always been a single booking fee that went up by a certain percentage every year regardless of market condition accept the rising costs faced by GDSs,” said Gibson.
Also speaking was Sabre Travel Network vice president northern region and global accounts EMEA, Reet Wiseman. She told the audience: “I think that the key problem is that airlines are focussed on the booking fee rather than the overall value we can bring. When you bundle all the services we offer you really see the value.”
However, she admitted GDSs need to raise their game. “We are entering a time when GDSs are going to have to offer enhanced services to travel providers or we will disappear off the radar,” she said.
“We are committed to working with airlines top find a way forward.”
Gibson said that Amadeus, like other GDSs, is considering a value-based pricing model to try to attract low cost airlines to distribute through Amadeus. “Low cost carriers do not want to pay the booking fee because it doesn’t fit with the way they work. That’s why we’re developing a specific low cost carrier system,” she said.
Rounding off his presentation, Jeans said: “I’ll be pushing up daisies before the GDS sector costs are reduced.”
Report by Ginny McGrath
Ginny McGrath
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