Singapore Airlines has decided to implement a $12 penalty for bookings made on global distribution systems. The airlines has done so as an attempt to persuade corporate travel agencies to use the New Distribution Capability channel when booking tickets.
On July 2nd, Singapore Airlines announced that the surcharge will be effective starting on January 4th, 2021, and for the following territories:Singapore, Indonesia, Australia, New Zealand, UK, Germany and Switzerland. More locations would be announced gradually. Tickets issued through the New Distribution Capability channel would not incur a distribution fee.
In Europe, many carriers are also reviewing their distribution strategies. In the past, European airlines have removed the cheaper fares from the global distribution systems, putting them in the New Distribution Capability channel.
Will Fares Rise For Corporate Travelers?
Corporate travel agencies without the capability to connect to New Distribution Capability fares could face a disadvantage. Some companies may have direct integrations into airlines’ systems and thus be able to avoid the surcharge.
The New Distribution Channel model could be seen as bad news for travel agents because they won’t have all the content in one place. They used to have it that way on the global distribution system. Multiple booking channels being opened by airlines could create inefficiencies and reduce the travel agents’ productivity.
Sticking with the traditional method means adding on an extra $12 per ticket.
The impact to all travel agencies could mean: use the New Distribution Capability or pay more. Many analysts believe that American carriers are observing the move by Singapore Airlines as a signal that something is about to change and start to take similar actions.