EasyJet has signed breakthrough deals with Amadeus and Travelport to sell tickets via the Global Distribution Systems
From early December, easyJet tickets will be offered by corporate travel agents in a major push by the low-cost carrier to increase the proportion of its sales to business travellers from 20% to 25% within three years.
The carrier has been working on taking the GDS route for about 18 months and finalised deals with distribution giants Amadeus and Travelport in November. However, unlike some other low-cost players, it would never have contemplated using the traditional GDS fee and technology structure, which easyJet head of brand marketing product and distribution Paul Simmons says "we wouldn't touch with a barge pole".
"This is all about entering the GDS on our terms - that's the key difference," he adds. "The deal is all about protecting our key asset - easyjet.com - identifying the key business segment and having an extra protection level with the pass through fee."
For easyJet the need to access corporate travel agents was important as its website is "mostly not going to attract business travellers in significant numbers", says Simmons. "But we are not interested in the leisure travel trade. We wouldn't do anything in the world to hurt easyjet.com."
To cover the booking fee imposed by the GDSs and to avoid leisure bookings moving from its website to the travel agents, and also to cover the possible loss of ancillary revenues made via its website, easyJet will charge a €7.50 ($11) fee per sector for bookings with one sector. The fee drops to €6 for two sector bookings and €5 for three or more sectors bookings. This is on top of the basic fare. Persuading the GDSs to accept a pass through fee and essentially change their business model was crucial for easyJet, says Simmons.
For its part, easyJet will pay the GDSs a booking fee per transaction, but the deals do not involve any other fees or lump sums or payments for the technical link ups, he says. It is understood easyJet will pay booking fees around a third less than an airline with full GDS access. It will pay a GDS fee of €2.50 per sector for bookings made in the UK, €3 for bookings in other European countries and €3.80 outside Europe.
Jesper Soderstrom, who leads the low-cost carrier business unit at Amadeus, says the simplified GDS solution easyJet has adopted will be attractive to many carriers with mostly point-to-point sales and no interlining but who want to tap business travellers. Seven carriers have already said they will go live with similar projects next year, Soderstrom says.
Source: Airline Business
