SWISS to adopt new distribution structure for its fares

18 January 2008

SWISS will be introducing an additional distribution structure for its fares on October 1, 2008, together with a new preferred fare model for travel agencies. SWISS’s lower or “preferred” fares will continue to be available: to SWISS customers obtaining their tickets directly from SWISS.COM, a SWISS call centre or a SWISS ticket desk, and to travel agencies via the new “preferred fare model”. The new arrangements pay due regard to international market trends, and will lower the distribution costs associated with the worldwide global distribution systems, which have been rising steadily over the past few years.

The introduction of the new preferred fare model will ensure that travel agencies continue to have access to SWISS’s preferred fares via the global distribution systems (GDSs). Preferred fares are those fares that will not be subject to the fare increases (CHF 25 for one-way and CHF 50 for round-trip tickets) planned for October 1, 2008.
To retain such access, the agency will need to conclude a preferred fare agreement with SWISS. Once they have done so, they will be able to access the full range of SWISS fares (including the low SWISS preferred fares) from Switzerland via any GDS. And SWISS will receive a fee of CHF 8 per coupon plus any VAT applicable on every ticket issued. The preferred fare model can be used in combination with any GDS in Switzerland, Germany or Austria.

All SWISS fares – including the new preferred fares – will also be viewable and bookable via a new SWISS online agency portal which can be used free of any fee. And agencies will continue to be able to access SWISS’s public fares via the classic GDS channel. Customers booking their flight directly with SWISS will also benefit from the new preferred fares, which will be available free of any fee via SWISS.COM, any SWISS call centre or any SWISS ticket desk.

The new distribution structure is being introduced in response to international market trends. US and UK-based airlines have found that, by introducing preferred fare models, they can successfully counter the growing fragmentation of fare information in different GDSs, and can also achieve sizeable cost savings.

“In introducing our new preferred fare model, we will continue to offer our travel agency partners direct access to our full fare range,” says SWISS Chief Network & Distribution Officer Harry Hohmeister. “At the same time, our new structure pays due regard to the substantial increases in GDS distribution costs that we have seen over the past few years.”

“We remain convinced that the GDSs add genuine value to the distribution process,” Hohmeister continues. “But these systems’ commercial models have changed; and we are making our own innovations in response to those changes. After all, we must find ways of ensuring that distribution via the GDSs continues to make commercial sense.”

The new SWISS preferred fare model will be introduced in Switzerland and Liechtenstein on October 1, 2008. Prior to this, it will be introduced in Germany and Austria on July 1, 2008.