Lufthansa Group Introduces Booking Fee On Tickets Booked Via GDS

As of Tuesday, September 1, all airline tickets issued by a booking channel using global distribution systems (GDS) for flights with Lufthansa, Brussels Airlines, Austrian Airlines and Swiss, will include a new “distribution cost charge” (DCC) of 16 euros. The DCC stands for tickets purchased anywhere other than through LHG websites, service centers and airport ticket counters.

The 16-euro surcharge is part of an overall change of the commercial strategy of the airlines of the Lufthansa Group, announced early this summer. The surcharge is said to be a response to fees Lufthansa and other airlines pay to distribution companies.

“Our realignment of our distribution has prompted an intensive exchange of views and experiences within our industry”, Jens Bischof, Chief Commercial Officer of Lufthansa German Airlines, said in an announcement.

According to Lufthansa, the efforts to develop and establish new “direct connect” booking channels are generating strong interest among industry partners.

“The market is clearly ready for innovations and developments of this kind,” Mr. Bischof said.

Controversy

Lufthansa’s decision to add the DCC to tickets booked via GDS was not well received in the travel industry.

The Group of national travel agents’ and tour operators’ associations within the EU (ECTAA) in July filed a formal complaint with the EU Commission – Directorate General for Mobility & Transport against Lufthansa Group concerning the 16-euro surcharge.

“Such charge will constitute a significant price increase for consumers and will put all travel agents at a competitive disadvantage compared to the direct distribution of the airlines concerned”, ECTAA had said in an announcement.

Lufthansa has announced that its customers can obtain their tickets without having to pay the new DCC by making their bookings via the member airlines’ websites, via an airline service center or at an airport ticket desk. Travel agents may also use Lufthansa’s dedicated online portal as a booking alternative.

However, ECTAA and its member associations claim that the options offered to customers by Lufthansa were “not efficient and viable alternatives”, as they would constitute a considerable step backwards to the currently highly automated booking and ticketing processes through GDSs.

German travel agents also called on the European Commission to stop Lufthansa’s DCC fee on competition grounds.

In regards to the controversy, Lufthansa CCO Bischof said that the company is still convinced that “offering advanced and, at the same time, substantially cheaper additional booking channels” is in its customers’ best interests. “And that’s why we consistently pursue the further development of our distribution channels”, he said.

“We want to work together with the travel agents and the global distribution systems to make the sale of air tickets more up-to-date, more inexpensive and more customer-minded,” Mr. Bischof underlined.

“And to this end we have swiftly developed a range of IT solutions that will be offered to our customers in the near future.”