Surcharge Raises Ire - InformationWeek

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8/27/2004
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Surcharge Raises Ire

The only no-fee ticket on Northwest is an online ticket from the airline's Web site

When Northwest Airlines Corp. said last week it will charge extra fees for tickets not bought on its Web site, it caused a chain reaction in an industry still grappling with the impact of the Internet.

Starting this week, Northwest will charge travel agencies and Web sites such as Expedia and Travelocity an average of $7.50 on each round-trip ticket they buy through "distribution networks" such as Sabre Holdings Corp.'s Sabre Travel Network. That will help offset fees Northwest pays to those networks; the airline says it paid $180 million last year, a cost that low-fare competitors don't have to bear.

"Since we compete with the low-cost carriers on price, it's essential that we take steps to compete with them on distribution costs," said Tim Griffin, Northwest's executive VP of marketing and distribution, during a conference call last week. Northwest also said it would charge an additional $5 on tickets booked through its call center or at airport ticket counters.

Sabre, the nation's largest distribution network, countered with a breach-of-contract lawsuit. Sabre and rival network Galileo, a subsidiary of Cendant Corp., said they will display Northwest fares less prominently to agents. A day after Sabre filed its lawsuit, Northwest filed its own breach-of-contract suit against Sabre.

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