ASTA Condemns Northwest GDS Booking Fee Charges

ASTA has condemned Northwest Airlines' (NW) announcement that effective Sept. 1, 2004, it will begin charging travel agents $7.50 roundtrip or $3.75 one-way for bookings made in a Global Distribution System (GDS) for travel within the 50 United States, a fee which will be collected via a monthly invoice.

In addition, effective Aug. 27, 2004, Northwest plans to charge consumers a $5 fee for bookings made through its call centers and a $10 ticket fee for tickets purchased at an Airport Ticket Office (ATO) for travel within the 50 United States.

"Northwest calls this a 'Shared GDS Fee,' which implies they are doing something good for us," said Richard M. Copland, CTC, ASTA president and CEO. "My answer is: Don't do me any favors. When I want you to share your costs with me, I'll let you know. It is insulting to be sent a message that says Northwest is 'sharing' with me, when what they are doing is pushing their costs on to my business and my customers.

"Northwest's announcement to agents makes clear that it wants to drive agents to book on Northwest's Web site, without addressing the fact that airline Web site bookings are not a complete substitute for GDS services," added Copland. "The airline's announcement reflects a failing business strategy and inability to compete with low-cost carriers, and its so-called solution is to impose the cost of its failure on travel agents in a move that will ultimately result in higher costs for consumers doing business with it. This action will result in huge management inefficiencies in an agency's front office."

"Northwest is, in effect, telling travel agents it wants them to pay Northwest for the privilege of using a business tool that is superior to what it offers. This is not a question of being for or against the Internet. It is indisputable that the airlines' Web site booking services are inadequate for the professional management of travel services. Even the Department of Transportation recognized this basic reality in its final decision deregulating the CRS business: 'The inefficiency of using the Internet for airline bookings is probably the most important deterrent to a greater use of the Internet [by travel agents].' Northwest is less efficient than many of its competitors and now it wants to drag the travel agents down with it," Copland concluded.