Northwest Airlines is to impose a $3.75 one-way or $7.50 round-trip “Shared GDS Fee” on agency-issued tickets for US domestic travel from September 1 in a clear effort to reduce disribution costs.
The airline says it is moving towards aligning its distribution costs with low-cost carriers.
Once all its cost-savings are in place, the airline says it will cut domestic costs by $70 million.
Agencies that bypass the GDSs for reservations on Northwest will not have to pay the shared fee.
Northwest says unlike many low-cost carriers, it pays an average of $12.50 for each ticket booked; the airline has been absorbing all of that cost.
“Since we compete with low-cost carriers on price, it is essential to take steps to be competitive with them on distribution costs, where they currently have a clear business advantage over Northwest,” said Tim Griffin, executive vice president, marketing and distribution.
How the new fees will impact agents:
• Northwest will continue to offer travel agency ticket sales through http://www.worldagentdirect.com/ without fees through its web site designed specifically for travel agents.
• Agents using technologies that bypass GDS to issue their tickets will not incur a new “Shared GDS Fee.”
• US and Canada-based agents issuing tickets for travel within the US through a GDS will be billed for a new US $3.75/CAD $4.75 one-way, US$7.50/CAD$9.50 roundtrip, Shared GDS Fee.
• Northwest will continue to absorb about $5 of the $12.50 in charges it incurs, on average, for each domestic ticket issued through a GDS, according to the airline.
Report by David Wilkening
