British Airways to terminate some private channel agreements

British Airways is understood to be ending selected private
channel agreements at the end of the year, leaving the customers of some travel management companies newly exposed to the airline’s Distribution Technology Charge (DTC).

The airline’s private channel (PC) agreements have enabled
mostly larger TMCs to provide their customers with access to British Airways and Iberia content without paying the carriers’
DTC of £13/€15 per sector that is applied to EDIFACT-based GDS bookings.

In what is seen as a bid to accelerate the adoption of New Distribution Capability (NDC) channels, multiple TMC sources have told BTN Europe that British Airways has
communicated its plans to terminate their private channel agreements on 31 December.

In communications to some TMCs seen by BTN Europe today, the airline
wrote: “When your PC agreement expires your corporate accounts will
no longer have access to DTC-free content.”

At the time of publication, British Airways had not responded to BTN Europe’s request for further information and the extent of its plans to terminate such agreements with its TMC partners was unclear.

However, a spokesperson for American Express Global Business Travel told BTN Europe that it “will still have a private channel agreement in place beyond January 2025”. In May
this year it announced the extension of its PC agreement with British Airways
but did not specify the length of the extension.

BA and Iberia introduced the DTC surcharge in 2017 to “recover
distribution costs where bookings are not made through NDC or other
low-cost channels”.

British Airways said in its communications that it offers alternative channels that
allow TMCs to avoid its DTC surcharge, adding that “booking via NDC not only
excludes our customers from the DTC, but also plays a pivotal role in enabling
modern retailing, offering a more seamless, technology-first approach to
distributing our content.”

Travel management companies can source airline content from a number of channels including both EDIFACT and NDC-based GDS content, direct connections with airlines and via content aggregators. 

British Airways and Iberia have provided DTC-free content via private channel
agreements since 2017 as a “temporary solution to support you as we transition
to New Distribution Capability. We offered this initially as a temporary
solution, as we recognise that NDC adoption is a journey.”

PC agreements have been extended “several times” to “provide
support to agencies during the transition to NDC,” it continued, “particularly
for business travellers where we know the requirements were more complex and
needed additional time. Now is the time that we have to move forward.”

In its communications to TMC partners, British Airways said
it is ready to support “both those that are firmly on that journey as well as
those that are just starting”.

The airline also said it would be notifying its corporate
customers of the change “to ensure they are able to assess the impact to their
business”, stating: “To avoid DTC, agents can connect to NDC. Please speak to your TMC to understand how this might impact you.”

In the UK, Gray Dawes Travel and Navan are among the TMCs known to be processing the highest proportion of British Airways NDC bookings – around half of their total bookings with the carrier – while Reed & Mackay recently reported more than a quarter of its BA bookings were made through NDC channels.

• British Airways had not responded to BTN Europe’s request for further information at the time of publication.