Thanks for nothing! New reservations technology enables surcharges
A la carte. Unbundling. Value pricing.
All of these euphemisms refer to the new airline trend of charging passengers for everything they can think of that used to be free. But they’re not doing it alone. Now the SABRE reservations reservations system, used by many travel agents, is testing new technology to pay for extras in advance.
The system is being tested now on Midwest Airlines. It allows travel agents not only to sell a ticket, but also to charge the difference for a “premium” seat in the coach cabin.
For business travelers, this will definitely streamline the expense report process, as the charges will all occur at the same time. Presumably SABRE and Midwest also hope that agents will encourage their clients to purchase an upgrade to the better seats upfront.
And despite additional nonrefundable charges of $25 to $75 per seat “in the first week, without much fanfare, the company sold more than 400 premium-priced Signature Seats,” said Randy Smith, Midwest’s vice president of sales.
Amadeus, a competing reservations system is already working on its own “Airline Retailing Platform” and no doubt Galileo, the other major travel agent reservation system, is not far behind. Amadeus is considered to have the most advanced platform for “unbundling” airline charges that is already in place with several airlines and it promises to work across airline alliances.
What does it mean for travelers? The easier it is for airlines to get extra money out of you, the more they will continue to experiment with the idea. Most passengers pay for airline tickets with credit cards, where paying a little extra might seem more painless than coming up with cash at the airport.
And as the traveling public gets used to making pricing decisions for extras upfront, the airlines get their money sooner. Plus, why stop at better seats? Meals, drinks, pillows, meals, baggage, in-flight Wi-Fi? All will be prepaid in future.
One possible upside for travel agents is that once a reservation system accepts additional fees beyond the basic ticket prices, in theory the system should also be able to allow agents to add their fees directly into those prices. If that happens, this may be a path to a better travel agent/airline relationship as well as more “convenience” for passengers when separating them from their travel dollars.
(On the other hand, a more likely outcome might be the airlines charging agents for adding fees onto the tickets, or demanding a percentage.)
But in the meantime, it’s a “win-win” — for airlines.
You may also be interested in these articles
- What’s “attribute based” shopping? Hint: it’s not going to make travel cheaper
- Is the cost of airline surcharges worth it? Yes — and no
- Southwest Airlines hopes to shorten waiting time at the ticket counter
- Baggage charges crowd airline carry-on space
- So what’s really behind that ticket price that you’re paying?
Comments
3 Responses to “Thanks for nothing! New reservations technology enables surcharges”
Please share your thoughts...
As a primarily leisure-oriented agent (with a few corporate accounts) I’m puzzled by the assertion that these unbundled fees will be “commissionable in some way or form”.
Other than under negotiated contracts (primarily corporate) t’s rare to see airline commission on domestic tickets; why it would be expected on surcharges is beyond me. And I’m in no hurry to see the day that such surcharges are extended to international fares.
Having the ability to sell these in the GDS systems may represent a convenience to our travelers but will also represent new formats to be mastered, additional opportunities for debit memos and, most likely, no additional compensation.
Somehow, I don’t see this as the path to “a better travel agent/airline relationship”!
That was my first reaction, actually…I’d really love to be wrong, but I think its unlikely that these new fees/surcharges would be commissionable to agentices.
What are you basing that statement on?
Hey all, the comment about the new fees being commissionable to agencies was an error in the editing process. I DON”T believe they will be commissionable at all. Maybe if agents are lucky the airlines will pay a bonus for a month or two - remember mileage bonuses for checking in online? But I think if anything it will just be another way for the airlines to do more work for less money…and another possible excuse to send bills - debit memos - to agents who don’t charge enough.
The only potential silver lining for agencies I see is that if the software allows additonal fees to be added to an airline ticket, perhaps it MIGHT let us add our service fee into the ticket price, which will make our invoicing a lot easier. And will make it easier for people being reiumbursed to have one price total rather than a ticket plus fees.