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Rethink on American Airlines booking source premium fees

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When in November American Airlines announced its imposition of a Booking Source Premium fee on Accredited Agents, UFTAA sought to lay hands on the facts and to persuade those involved that there has t

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When in November American Airlines announced its imposition of a Booking Source Premium fee on Accredited Agents, UFTAA sought to lay hands on the facts and to persuade those involved that there has to be a better way to resolve the AA versus Travelport dispute. For UFTAA and its members, forcing agents to foot the bill for the consequences of a dispute that has nothing to do with them, is grotesquely unfair and crassly insensitive.

Not being familiar with the intricacies of the airline/GDS dispute, UFTAA refrains from taking a position on the respective merits of the protagonists’ cases. That is a matter best left to the courts. However, UFTAA does take a firm stance against the looming injustice now facing IATA Accredited Agents who happen to have signed up in good faith with Galileo or Worldspan.
Those intermediaries, spread over 55 countries designated by AA, have been told that henceforth, they can expect to be billed a supplementary charge by AA on each segment booked over AA using either of the above GDS, whether or not the ticket issued was in the name of AA. That billing will be in the form of an ADM, sent after the sales transaction has been completed, and in all likelihood, after the passenger has flown. What are Agents’ cost recovery chances there? IATA has apparently agreed to fall in with AA’s plans by accepting to process the offending ADMs through the BSP machinery. Under IATA’s rigorously enforced group boycott rules an Agent’s ability to do business with any and all BSP Airlines can be paralysed if the Agent tangles with the boycott. Exposure to such punitive action for resisting the contentious ADMs will put considerable pressure on Agents to knuckle under and pay up.
UFTAA challenges the use of ADMs on the grounds invoked by AA. ADMs are there to serve a particular purpose and are essentially corrective devices for dealing with exceptional occurrences. Under the threatened scenario they will become routine actions, initiated automatically after the fact, whenever an Agent happens to book an AA segment using either Galileo or Worldspan. This is set to happen, even when the issuing airline is not AA and thus where that airline is not in a direct contractual relationship with the Agent for the transaction in question. The projected precedent is a dangerous one.
In the above circumstances, UFTAA considers that any hint of implicit coercion would constitute an abuse of the privileged and considerable discretionary restraint of trade powers that have been entrusted to IATA, on the condition that the rules be applied neutrally, scrupulously and with absolutely no bending.

Some Accredited Agents face a grim 2011 prospect as a consequence of this new threat and one may well ask whether those responsible for creating that threat have thought through the implications of their actions.

UFTAA sees flaws in AA’s announced course of action which it considers would contravene both the letter and spirit of IATA Resolution 850m. Unlike AA, which had full opportunity to take part in the drafting of Resolution 850m and in its adoption by the IATA Passenger Agency Conference, Accredited Agents had no voice and no choice. Acceptance of Resolution 850m is one of the mandatory conditions of their IATA accreditation. That is tolerable provided the resolution is applied even-handedly, as written. UFTAA is accordingly encouraging its members to re-read the rules and to be ready to invoke the ADM dispute procedures. (viz Resolution 818g, Attachment ‘A’, §1.7.8 or Resolution 832, §1.7.10) Both those resolutions are published on the IATA website in the Travel Agent’s Handbook.

As to the Agency Administrator’s role in authorizing collective disciplinary action against a targeted Agent who might resist the above arbitrary ADM treatment, UFTAA has sought an explanation from IATA, more than once since November, but none has been forthcoming. Nevertheless, UFTAA is on hand to offer suggestions to IATA and to assist those of its members who may wish to seek review by the Travel Agency Commissioner under the provisions of IATA Resolution 820e, §1.1.10.

UFTAA is not the only travel agents association to approach the protagonists and IATA to protest and to reason with them on this issue. There is still time to correct this flawed course of action before the situation can turn sour and litigious. As 2010 draws to a close, one hopes that certain parties’ New Year’s resolutions include a determination to do the right thing by IATA Accredited Agents, who are, after all, still their principal source of sales. That would be a New Year’s resolution to which UFTAA would heartily say ”Amen”.

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About the author


Editor in chief is Linda Hohnholz.