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Lufthansa’s Decision to Charge for GDS Bookings Sparks Reaction from Amadeus

lufthansa_1The Lufthansa Group airlines announced on Tuesday that as of September 1 it will include a 16-euro surcharge — the Distribution Cost Charge (DCC) — for every ticket issued by a booking channel using GDS for flights with Lufthansa, Austrian Airlines, Brussels Airlines and Swiss.

The DCC is part of an overall change of the commercial strategy of the airlines of the Lufthansa Group, an announcement read.

According to Lufthansa Group, the costs for using global distribution systems (GDS) are several times higher than for other booking methods, such as its own online portal.

“In total, the yearly GDS costs come to a three-digit million euro amount for the Lufthansa Group”, Lufthansa Group said, adding that the GDS services are primarily used by other partners in the value chain.

“A large number of services are paid by the Lufthansa Group carriers, but are only partly used by them… As of 1 September 2015, the Lufthansa Group airlines will, therefore, include a surcharge, the ‘Distribution Cost Charge’ (DCC) of EUR 16 for every ticket issued by a booking channel using GDS”, the Lufthansa Group said.

According to the announcement, the new charge will not be added to flight tickets purchased using Lufthansa Group airlines’ websites and ticket counters at airports.

“Travel agencies will also be able to book tickets without the DCC, using the online portal at www.LHGroup-agent.com”, the Lufthansa Group noted.

Amadeus: Lufthansa Group’s new charges will penalise travellers

On its part, Amadeus released a statement criticizing Lufthansa Group’s decision.

AF_AMADEUS_POS_CMYK“Travellers today are looking for consistency, transparency and choice across all channels and we as an industry can deliver that best by connecting and integrating all players”, Amadeus said.

“Lufthansa Group have chosen to go in a different direction by introducing charges that will penalise travellers based on the shopping channel they use.”

According to Amadeus, travellers will either pay more for the same service or, in the case that travel agencies are forced to accept this new commercial strategy by modifying the way they access content just for Lufthansa Group, there will be extra IT costs that may ultimately be passed on to the traveller, putting the travel agent, and/or the end consumer, at a disadvantage.

“This new model will make comparison and transparency more difficult because travellers will now be forced to go to multiple channels to search for the best fares. Ultimately, the industry overall stands to lose from this distribution model.”

The announcement issued by the Lufthansa Group also mentioned that the Lufthansa Group’s airlines are in the process of developing a new booking method to enable sales partners to connect to their IT systems directly based on the new IATA data standard NDC (New Distribution Capability).

“The first NDC pilot project is currently being tested at Swiss and should begin at Lufthansa during the course of this year”, the Lufthansa Group said.

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