Airlines should look to credit card practices to improve profits: UATP

Washington DC
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As the airline industry looks forward to a return to profitability in 2010, it may be overlooking a major drag on the bottom line - the high cost of commercial credit card transactions, according to the Universal Air Travel Plan (UATP).

Last week in Berlin, IATA announced that it expects a return to profitability of $2.5 billion this year. IATA director general Giovanni Bisignani expressed "cautious optimism" while noting costs that could threaten to return to profitability. Bisignani ticked off a list of potential areas of concern that included overcapacity, labor strife, taxation and cost of oil.

"We praised the efforts addressed by IATA on behalf of our airline owners, however, the failure to address credit card fees will be a continual drag on earnings," says UATP president and CEO Ralph Kaiser. "Credit card fees continue to rise and affect the bottom line of the airlines.

UATP provides low-cost corporate charge card services which airlines offer to corporate account holders.

Kaiser says that airlines need to review card agreements and "rationalize card fees" with credit card partners to ensure that they receive a true value for the money. "The true cost of accepting credit cards is higher than most airlines realize and more times than not exceed GDS fees."