Latam Airlines, the prominent South American airline group, is updating its fee structure for bookings made through global distribution systems (GDS), aligning surcharges more closely with the cost of using each specific platform. This strategic adjustment, effective May 12, reflects the airline’s ongoing efforts to modernize its distribution methods while managing costs associated with legacy and emerging booking technologies.
Currently, Latam charges a flat surcharge of $13 per segment for GDS bookings made using legacy systems. However, the forthcoming changes will introduce a tiered model that varies by both the GDS provider and the geographical origin of the booking. For travel agencies in North America, bookings made through Amadeus will now be subject to a $15.96 surcharge per segment, while Sabre bookings will incur a fee of $14.19. In contrast, Travelport users will see a reduction, with the surcharge dropping to $11 per segment.
This move highlights the airline’s intention to recover costs more accurately, as different GDS providers have varying fee structures and integration capabilities. In a formal update, Latam noted that the changes are part of its broader objective to balance distribution costs with the efficiencies of newer technologies, particularly as the airline expands its use of New Distribution Capability (NDC) standards.
NDC, a modern data transmission standard developed by the International Air Transport Association (IATA), enables richer content and more personalized offers for travelers, all while allowing airlines to bypass some of the traditional limitations and costs associated with legacy GDS infrastructure. Latam is actively adopting NDC, having gone live with NDC bookings on Sabre in late February. It also has agreements in place with Amadeus and Travelport, with launch timelines for NDC-enabled services on those platforms expected to be announced in the near future.
While the implementation of NDC is generally seen as a progressive step for airlines and customers alike, Latam will still apply surcharges to many NDC-based bookings. However, these fees are notably lower than those attached to legacy bookings and are differentiated based on fare type and route.
For instance, Sabre’s NDC bookings will carry no surcharge for basic fare brands, which are typically the lowest fare offerings. Bookings for all other fare types will have a $4 per segment surcharge. Amadeus NDC bookings will include a $3 surcharge for domestic flights and $6 for international segments. Travelport’s NDC structure is even more nuanced; Latam will waive surcharges for bookings of the lowest available fare class, while other fares will carry a $2.50 fee per segment.
Latam’s decision reflects an industry-wide trend toward recalibrating GDS-related costs, especially as airlines increasingly prioritize direct connections and digital retailing capabilities. By tailoring surcharges based on the cost and capabilities of each GDS, Latam aims to incentivize the use of more efficient distribution methods while maintaining transparency and cost alignment for its agency partners.
