American Express Global Business Travel in September enacted
a $10 surcharge to process "high cost" airline transactions. It's a
descriptor Frontier Airlines, Ryanair, Southwest Airlines and Spirit Airlines
would disclaim. Yet, those airlines and other so-called low-cost carriers have
become more costly for Amex GBT clients to transact. "Leisure-type
airlines" are getting more into corporate travel but with a less
integrated, efficient and effective distribution process, Qualantone said,
adding that Amex GBT can't keep subsidizing those costs.
The fee applies to carriers that defy industry standards:
those that participate at a lower level in global distribution systems, those
that don't file fares through the Airline Tariff Publishing Co. or those that
do not settle agency transactions through ARC or non-U.S. Bank Settlement
Plans.
The additional costs for travel management companies to
process and manage such bookings have been around for some time, and others
also have passed them on to clients. But Amex GBT's surcharge raises the cost
structure for clients that book a significant number of these transactions. It
also provides corporate clients a disincentive to book these airlines and calls
attention to underlying costs in the distribution chain. In the past, "the
majority of the higher costs had been being absorbed within our normal pricing
environment," Qualantone said.
He acknowledged that some customers are not enjoying
conversations about higher costs. As described by Qualantone in October, the
rollout is progressive. We've moved forward in certain parts of our business
with this, and we're going to continue to move forward as we do this on a
global basis."