ITM Suggests Buyers Should Include Mandatory Requirement for Ancillary Fee Filing in Airline Contracts

Updated: 05-07-2011

The Institute of Travel & Meetings (ITM) UK & Ireland has provided guidance to UK & Ireland business travel buyers in its latest 50 page report on ancillary fees and direct connect technology. In the report, entitled, The Collapse of Simplicity, the association gives the following guidance to corporate travel buyers;

  • Implement revised travel policies - The association advises travel managers to adjust their travel policies to help them manage demand and payment of ancillary fees.
  • Keep talking - ITM strongly urges all stakeholders to make this issue a top priority and engage with each other in a more committed fashion.
  • Provide pressure and support - Individually, travel buyers can pressure preferred suppliers for change. Jointly, ITM is working with other European buyer-led associations through the newly established GBTA Europe Advocacy Group to lobby relevant stakeholders and the European Commission on ancillary fee distribution.
  • Negotiate hard - Wherever buyers can measure spend on ancillary fees, ITM suggests that they should bring that spend back into negotiations with preferred suppliers.
  • Update contract terms - ITM recommends that buyers should ensure that contracts draw attention to the need for participation of suppliers in existing processes which support managed travel. This includes the mandatory filing of ancillary fees through existing distribution processes.
  • Prepare for distribution fees - ITM advises members that ultimately, more of the cost of distribution is coming buyers' way. Whether distribution is retained through the GDSs or undertaken through Direct Connect or workarounds, the charge that suppliers make for this to the travel booker is becoming more overt within the supply chain and buyers should prepare for it.
  • Engage with your TMC - While ancillary services continue to be delivered outside the existing distribution system, the association recommends buyers to talk to their TMC about how to book such services and how much it will cost.

Talking about the guidance to its members, Jamie Hindhaugh, ITM's chairman, says "The situation today is unacceptable. The current inability to book or track ancillary items through the established managed travel process is undermining corporate travel programmes. The situation must be improved. ITM is open to change but not if it will involve costly or inefficient workarounds. As an organisation we are not pro-GDS or any other supplier type, but we back any system that supports the managed travel process. The GDSs and others have invested heavily in facilitating a solution that would support managed travel. All other systems remain unproven to date."

Referring to the present GDS solution (OC codes and EMDs) Mr Hindhaugh added that the association's investigations suggested that these solutions will work and he encouraged all stakeholders to get behind them for the sake of managed travel..

ITM's position is contained in the full report, available to all ITM and GBTA members free of charge in the reports area of the website. If you are a ITM member, please log in to access the report.


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