American Airlines has sued airfare consolidator USA Gateway – which does business as GTT Travel – alleging that GTT tricked travelers into thinking they were booking directly with American and then defrauded them of fares. and exorbitant fees.
The ticket aggregator industry is not well known even to some travel industry insiders. But the lawsuit, filed late last month, opens a window into the business model. GTT has until September 22 to respond to the airline’s complaint.
Michael Hurst, an attorney at Lynn Pinker Hurst & Schwegmann who represents GTT, told Skift:
“GTT strongly denies the allegations contained in this litigation. In this case, and in other recent cases, American appears to blame the industry’s operational deficiencies on its business partners and others. GTT appreciates the decades-long relationship between the company and American and regrets the rush to pursue legal action and looks forward to working together in a friendly and productive manner to resolve any issues. If the parties fail to resolve this issue, GTT is prepared to vigorously defend itself against these unfounded claims.
The GTT website claims it is the “largest airline ticket consolidator in the United States,” and the lawsuit says it claims to generate more than $2 billion in annual “revenue.”
Airlines may use aggregators so they can sell otherwise empty seats at deeply discounted prices without announcing how much they are reducing their published fares.
American said GTT – which lists on its website its partnerships with American, United, Delta, Lufthansa, Emirates and about 50 other global airlines – is negotiating a contract with American to gain access to discounts on the fare codes of the airline for itself and its partner travel agencies. These can include net or wholesale rates. GTT also wins incentives depending on the volume of tickets sold. According to the lawsuit, it generates these volumes by entering into partnerships with travel agencies.
Here are other ways GTT and other airfare aggregators make money, according to the lawsuit:
- GTT collects fees from these partner travel agencies, including perhaps a commission of $20 per booking, and may collect an additional 3% of the booking total;
- GTT receives a volume incentive from American;
- When partner travel agencies, or sub-agencies, charge additional fees, whether legitimate or not, to travelers, GTT gets a discount.
In one case cited in the lawsuit, a GTT sub-agent charged a traveler $1,500 for what should have been an airfare of around $1,000, and GTT allegedly helped its partner travel agency to “hide the additional $500 fee”.
“GTT and its sub-agents have engaged in grossly deceptive practices solely to benefit GTT and to the detriment of travelers,” American told Skift in a statement. “GTT overcharges and hides fees from customers and engages in prohibited ticketing practices. Such actions are harmful and unfair to consumers, misrepresent American Airlines, and violate numerous terms of GTT’s contracts with our airline.
Another major point of the lawsuit is that GTT would not track the activities of its sub-agents and would refuse to provide their names to the airline, as required by their contract.
The lawsuit alleges that GTT and its partner travel agencies sometimes inflate the actual fare and pocket the difference.
According to the lawsuit, these GTT contractors mislead consumers with misleading phone numbers, websites and social media posts that trick consumers into believing they are booking directly with American Airlines – when in reality they do business with GTT. This increases GTT’s volumes, incentives and commissions, the lawsuit claims.
Like with The recent lawsuits filed by the Americans against Skiplagged and Kiwi.com, American accuses GTT and its partner travel agencies of using hidden city ticketing – where a traveler gets off at a stopover to get a discounted fare compared to paying for a direct flight – and of not not pass the savings on to the traveller.
“In a recent example, GTT booked 20 tickets on an itinerary departing from Dallas Fort Worth International Airport, stopping at Shanghai Pudong International Airport, then heading to Hong Kong International Airport. Seventeen of those passengers simply got off in Shanghai and did not go to Hong Kong, leaving those seats empty,” the lawsuit alleges. “GTT and/or one of its sub-agents did this because it was cheaper than booking these routes directly in Shanghai, but they didn’t even pass the savings on to the consumer, but instead pocketed money for themselves.”
In another alleged area of wrongdoing, American said a sub-agent, identified as Go Travel Desk on the receipt, charged a traveler a “tax fee” of $400 on a $1 plane ticket. $086.
“There are no ‘tax charges’. says the lawsuit. “Yet, after seeing this $400 “tax charge,” GTT took no action to address the obvious fraud by its subagent, as required by the GTAA (GTT Incentive Agreement).
American alleged that the practices of GTT and its subagents hurt the airline’s revenue, in part because travelers sometimes tried to book directly with American but were fraudulently misdirected. And it hurts the airline’s reputation when travelers learn that a seat they thought they had reserved isn’t available, or they have a connecting flight they reasonably can’t make.
American accuses GTT and its partner travel agencies of unethical practices and breach of contract.
“GTT sub-agents use American tickets, data and content to engage in abusive practices and fraudulent activities, including misleading themselves to consumers, improperly sealing tickets, falsely claiming that certain tickets are not available, inflating ticket prices, charging fabricated fees. such as “wheelchair” fees, seat assignment fees, and unauthorized baggage fees, concealing agency fees from the client, and misappropriating American’s data and content to achieve this,” indicates the trial.
American is seeking damages, attorneys’ fees, and “that GTT pay pre- and post-judgment interest at the highest possible rate.”
