Starting this week, Northwest will charge travel agencies and Web sites such as Expedia and Travelocity an average of $7.50 on each round-trip ticket they buy through "distribution networks" such as Sabre Holdings Corp.'s Sabre Travel Network. That will help offset fees Northwest pays to those networks; the airline says it paid $180 million last year, a cost that low-fare competitors don't have to bear.
"Since we compete with the low-cost carriers on price, it's essential that we take steps to compete with them on distribution costs," said Tim Griffin, Northwest's executive VP of marketing and distribution, during a conference call last week. Northwest also said it would charge an additional $5 on tickets booked through its call center or at airport ticket counters.
Sabre, the nation's largest distribution network, countered with a breach-of-contract lawsuit. Sabre and rival network Galileo, a subsidiary of Cendant Corp., said they will display Northwest fares less prominently to agents. A day after Sabre filed its lawsuit, Northwest filed its own breach-of-contract suit against Sabre.