TNW pick of the week: Passive segments – who bears the cost?

By Rachael Penaluna

DUE to the increasing volumes of passive bookings, Travelport GDS has introduced a policy in the US whereby a charge will apply to travel agents who are unduly generating and benefitting from these kinds of segments above an acceptable threshold.

Martin Herbert, business development manager, Travelport Services AfricaIf, says: “At this point in time, there are no plans to implement this type of charging in SA. Airlines may be reporting a spike but we are not overly concerned by the levels of passives currently being generated in SA.”

Bookings made via a supplier direct connect or supplier website and stored in a Travelport system are common examples of air passive segments that, when above the baseline, will be subject to the GDS processing fee.

Martin adds: “Airline participants on the Travelport GDS have the option to allow passives or not, depending on their policy. Where airlines allow this activity and those passives are ticketed, we charge the airline for these segments as they are revenue generating bookings and we credit agencies accordingly. In this instance, all travel agents are causing processing costs but are not generating revenues for Travelport GDS or the airlines paying to participate on the system.”

Meanwhile, EgyptAir has announced it will now charge per sector for any passive segments booked in the GDS.

Gm for Southern Africa, Ihab Seif, says: “At the end of the day, passive segments are an additional service, which costs money. As these bookings spike, airlines and GDSs will have to re-evaluate their standing on this issue.”

US Airways confirms that due to the costs associated with GDS segment fees, the airline does not allow the creation of billable passive segment bookings. If billable passive segments are booked for ticketing purposes, any costs incurred by US Airways resulting from the creation of these segments will be charged back to the responsible agency and a service fee will be added.

Customer support executive at Amadeus, Caroline Smallwood, says ALTEA airlines on Amadeus allow Amadeus functionality to control passive segments. “Amadeus can ‘switch this functionality off’ if the airline requests it and avoid the implications of charging or issuing ADMs for passive segment bookings.”

Refer to TNW November 2 for more details.