Recent Moves By Lufthansa, Other Euro Airliners Could Be Bad For Companies Like Travelport, Sabre
Travelport Worldwide Ltd (NYSE: TVPT) and Sabre Corp (NASDAQ: SABR) 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) (OTC: BAIRY) 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.”
Related Link: Prepare For A Robust Memorial Day As Travel Volume Expected To Hit 12-Year High
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 (OTC: DLAKY) (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.
________
Image Credit: By Lasse Fuss - Own work, CC BY-SA 3.0, via Wikimedia Commons
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted-In: AmadeusNews Emerging Markets Eurozone Travel Markets Movers General Best of Benzinga