Airlines are increasingly turning to travel agencies to distribute more of their inventory, a trend that is now spreading beyond North America to a global scale, according to Mastercard.
At the Airline and Travel Payments Summit B2B in London last week, Esperanza Fernandez, Mastercard’s director of airlines, highlighted four major trends in the industry. These trends are encouraging more collaborative and transparent relationships between airlines and travel agencies as airlines look to use indirect distribution to increase sales.
Fernandez pointed out that the “merchant of record” model is growing. This model sees airlines supporting travel agencies in transacting directly with customers. This shift is driven by the fact that travel agencies can offer local payment options, higher payment approval rates, and stronger anti-fraud protections.
“The U.S. is seeing the most growth in this area,” Fernandez said. “While progress in regions like the Middle East is slower, the trend is already taking hold.”
In 2024, Mastercard predicts that nearly 19% of aviation transactions will be completed using a B2B payments model, up from 15% in 2023.
Another key trend is the merging of airlines’ sales, distribution, and finance departments. This approach helps airlines better control their payment strategies with agencies.
Additionally, airlines are seeking greater transparency from their acquirer partners and are adopting virtual card payments to settle payments with their vendors and partners.
