|
Article Excerpt
Carlson Wagonlit Travel on July 21 began communicating to clients it would charge $2 per airline ticket in an effort to offset the costs generated by global distribution systems' so-called opt-in programs, set to begin Sept. 1. This is the first stated plan by a travel management company to pass along the most recent turn in the economic and content battle between GDSs and airlines, in which the agencies agree to get Rdl content for an 80-cent reduction in per-segment incentives paid by GDSs or incur a $3.50 per-segment fee from several carriers.
Meanwhile, Amadeus last week filed a request for arbitration in its dispute with American Airlines and Northwest Airlines and an injunction preventing the carriers from charging a $3.50 per-segment fee for bookings made through nonpreferred channels---which would include Amadeus.
"We did the math on what it would cost across our client portfolio and figured out that $2 was the number, and that's certainly not a number that enriches CWT," CWT executive vice president Mike Koetting told BTN. "It's a pass-through calculation--a broad average across our client portfolio of the number of segments we had per air transaction. The $2 per air transaction is the amount that we believe, for simplicity's sake, is what the cost pass-through amounts to." The calculation is the midpoint between the cost of two segments at $1.60 and three segments at $2.40.
At press time, CWT was the only travel management company to initiate such a charge, but Koetting expects other travel management companies to follow suit. "I believe every other agency is subject to similar GDS economics," he said, "and that others soon will arrive at the same conclusion."
Like the 1995 cap on agency commissions, CWT and all of its competitors now must in effect negotiate with every customer and get them to bear the cost,...
|
|
More articles from Business Travel News
Vanguard files for initial public offering., August 14, 2006
SEC mulls SOX deadline delay for smaller companies., August 14, 2006
Senate passes pension bill., August 14, 2006
ECT plans full-service travel agency in Germany., August 14, 2006
Sourcing must not undermine business mission: OP-ED: prism group presi..., August 14, 2006
Looking for additional articles?
Search our database of over 3 million articles.
Looking for more in-depth information on this industry?
Search our complete database of Industry & Market reports by text, subject, publication
name or publication date.
About Goliath
Whether you're looking for sales prospects, competitive information, company
analysis or best practices in managing your organization,
Goliath can help you meet your business needs.
Our extensive business information databases empower business
professionals with both the breadth and depth of credible,
authoritative information they need to support their business
goals. Whether it be strategic planning, sales prospecting,
company research or defining management best practices -
Goliath is your leading source for accurate information.
|
|
