BA, Amex Settle Dispute, Plan to Launch New Card

BA, Amex Settle Dispute, Plan to Launch New Card

American Express and British Airways have settled a three-year dispute that forced purchasers to pay the processing fee on certain fares booked with payment cards, SupplyManagement.com reported.

Under the terms of the settlement, BA will resume paying merchant fees from October after Amex agreed to cut its rates.

The airline will also pay the fees for other card companies.

Larger organizations with net (upfront discount) negotiated deals with BA will make direct purchasing and indirect process savings as a result of the change.

Ken Gledhill, AstraZeneca UK travel manager, welcomed the news. “It simplifies what became a complex area when card charges were separated out,” he told reporter Amon Cohen.

Improved relations will also lead to a jointly branded corporate card, set to be launched later this year.

Aimed at the 13,000 smaller companies in BA’s “OnBusiness” program, the card will award frequent-flyer miles to cardholders, as well as points to the corporate client.

The card will also provide corporate clients with online management information that can be used to track travel and entertainment spend.

The original dispute started when BA said it would no longer cover the merchant fees for corporate net fare payments, which led to the two travel giants slugging it out in the courts.

Prior to the disagreement, fees averaged about 2 percent of the fare, with Amex thought to charge around 2.8 percent, according to SupplyManagement.com.

BA’s decision left corporate clients’ travel management companies footing the bill, which they passed on to customers.
It also led to BA and Amex launching counter-lawsuits for claimed breach of contract over the dispute in 2002. They dropped the legal actions in 2004.

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