British Airways to Overhaul Service Fees
Jan 25th, 2005 | By Jared BlankBritish Airways is implementing a wholesale pricing model in the UK, which is probably a piece of news you don’t care about. But I’ll tell you why you should care about it. The new model means that they will no longer pay travel agent commissions (not a huge surprise), but they will instead offer a so-called "net fare," where a base fare is offered and a service fee is tacked on depending on where you purchase it. For example, BA will charge $28 for a long-haul booking made over the phone (ouch!).
Why should you care? Well, BA is rumored to be looking at adding a small service fee for bookings made on its website—this way, it will charge a fare for the flight and try to recover the cost of distribution. I would not be surprised AT ALL if US airlines implement this type of fee this year. Since airlines complain constantly about distribution costs, I am certain they will take the opportunity to pass these costs on to consumers; hell, the online agencies have been doing it for years with little-to-no complaint from consumers.