News
27 May 2017

Recent Moves By Lufthansa, Other Euro Airliners Could Be Bad For Companies Like Travelport, Sabre

Travelport Worldwide Ltd and Sabre Corp plunged Friday as two European airlines announced new fees on tickets purchased through global distribution systems, which facilitate booking transactions between travel services and agencies.

British Airways plc (ADR) OTCBAIRY and Iberia will begin to enforce the 8-pound surcharge in November.

"We will continue to work with the GDS providers to distribute our content to valued agency partners via existing solutions,” the companies said in a statement. “However, these systems and their traditional technology solutions currently carry significantly greater costs to BA and IB.”

The cost of GDS bookings is about 2 percent of a total sale, according to a 2016 report by Amadeus.

To bolster revenue, the airlines intend to route customers directly through their in-house portals, and a surcharge imposition disincentivizes buyers from working with GDS, whose primary advantage is facilitation of automated purchases through price-comparison sites.

Deutsche Lufthansa AG (ETR: LHA) implemented similar fees in September 2015, charging GDS companies 16 euros per ticket, while Ukraine International Airlines imposed a $9 fee in April.

At the time of publication, Sabre was trading down 1.6 percent and Travelport 3.8 percent, while Britain’s Amadeus It Group SA (BME: AMS) was down 4 percent.

Full Article: benzinga.com

Source : benzinga.com

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