Canadian travel industry executives are weighing in on British Airways' and Iberia's decision to follow in the footsteps of Lufthansa Group and implement a surcharge on bookings not made via an NDC connection or other low-cost channel.

According to a letter sent to agencies today, British Airways and Iberia have announced that starting in November 2017, the airlines will begin adding a fee on every ticket booked via a non-NDC (New Distribution Capability) channel. Other IAG carriers Aer Lingus and Vueling are currently not affected by this change.

“…from 1 November 2017, British Airways and Iberia will apply a charge of £8/€9.50 [approximately $13.75 CA] per fare component to any bookings which are not made using an NDC based connection, or through other low-cost channels, such as our websites, airline sales offices and call-centres.” read the letter from the airlines to travel agents.

“Our distribution strategy is focused on providing an enhanced range of booking options to our partners. We will continue to work with the GDS providers to distribute our content to our valued agency partners via existing solutions, however these systems and their traditional technology solutions currently carry significantly greater costs to BA and IB. We are also continuing to work with the GDSs on potential NDC connectivity.”

Travel Management Companies and travel agencies are naturally concerned with this development.

"We are disappointed that British Airways and Iberia believe that the countless clients of travel experts should pay more for their choice to work with a professional." said Jason Merrithew, president, Merit Travel. "This type of counter competitive practice says to the Agency community, which has invested heavily in ensuring that their clients have access to the widest range of options at the most competitive prices, that Agency partnerships are only valued to British Airways under the airlines’ own terms.”

Brian Robertson, president Vision Travel, Ontario-West said "This is yet again another example of an airline not understanding the needs of their customers because corporate customers rely on Travel Management companies to manage their needs and Travel Management Companies rely on GDS companies for efficient, and productive distribution of the product. Adding a fee...to the transaction...to the highest percentage of transactions, is doing a disservice to the end user, who is the customer, because they're passing the cost on."

Much as they did when Lufthansa Group implemented their surcharge, other airlines will be watching closely as this development unfolds.

"Air Canada will watch how the industry evolves with great interest and we believe that disruptors will continue to introduce faster, more robust, and economically efficient ways to consume airline content.” said Duncan Bureau, vice president, global sales, Air Canada. “Airlines like Air Canada want to merchandise and display their inventory to consumers in a way that articulates the value of the products that we have available for sale."

TravelPulse Canada will continue to follow this story.

What do you think? How will this impact how you do business. We’d like to hear from you so please leave your comments below.

Follow @TravelPulseCA