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Amadeus targets more low cost carriers
More low cost airlines could be available to book by travel agents as Amadeus launches an “aggressive” 2005 pricing policy for airlines to distribute via the GDS.
A new “full content” option offering the lowest fee in return for airlines committing all inventory to the GDS is designed to attract low fare carriers who currently sell direct via the web or telephone.
It is designed to attract budget airlines who previously avoided selling via GDSs due to the cost of distribution.
New Amadeus UK managing director Stephane Durrand told TravelMole: “We hope it is an option for low cost carriers to come on board.”
He claimed this would benefit UK agents who currently do not have GDS booking access to such carriers.
Almost 500 airlines renewed with Amadeus when the new pricing structure was introduced for 2004.
Phase two for 2005 involves four pricing options based on route structure.
The company is cutting fees for domestic routes while increasing them for long haul services in the second stage of the “value-based” pricing model from January 1.
Amadeus says the new structure “recognises airlines’ diverse commercial strategies and the different benefits that the GDS channel brings to airlines today”.
The two key elements are:
*Development of a segmented booking fee structure, further differentiating the fee charged for different types of bookings, depending on the value each brings to an airline.
*Additional opportunities for the distribution of airlines’ low fare inventory.
David Jones, executive vice-president, commercial, said: “It is a year now since we made the first steps in our value-based pricing approach – moving away from a flat fee for all.
“The philosophy behind this model has been widely accepted by our airline customers. Indeed, we will see in 2005 that an Amadeus booking fee can range from 4.90 euros to as low as 2.67 euros – in line with the value delivered to the airline by a booking.
“The airlines tell us that the GDS continues to bring them important value – and in some areas of their business, unique business benefit.
“They say the GDS is the most effective way to deliver brand recognition and drive sales outside their home markets. It is the channel that facilitates the management of high yield and complex sales.”
Report by Phil Davies
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