Air France-KLM Hits Turbulence in Its Breakaway Distribution Effort

Air France-KLM said on Thursday it would postpone until as late as October 1 a plan to add a $28 (€26) roundtrip surcharge on corporate travel sales agencies that don't use a data exchange method it prefers.

The Franco-Dutch group was backpedaling from a more aggressive launch plan. Last month, the airline group said it would add a surcharge to corporate bookings by May 1. France's business travel employers' association protested, Preferente reported.

Air France-KLM said on Thursday it would continue to pursue a carrot-and-stick approach to business travel agencies, using a mix of fees and exclusive content to encourage more agencies to adopt the newer methods. It said that more than 20 percent of its plane tickets sold worldwide by corporate travel agencies already came via newer, more modern forms of selling.

"Air France-KLM is on a promising pilot phase with all global TMCs [travel management companies] and key local business agencies to jointly prepare the transition [to the newer method]," said a spokesperson.

Air France-KLM now hopes to do to corporate travel what it has done with leisure travel. In 2018, it began pushing leisure travel agencies to switch from using old technical methods, known by the shorthand “Edifact,” to a newer process referred to loosely as the “New Distribution Capability, or NDC.” It slapped a surcharge on leisure bookings done via the old way. It recently raised this fee to about $14 (€13) one-way.

Air France-KLM is one of about a dozen airlines that believe they’ll sell more using the more modern form of data exchange. Edifact is a legacy process made through the global distribution systems Amadeus, Sabre, and Travelport, which said they have begun offering the new distribution capability as a new option. But commercial terms remain a point of dispute with airlines.

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