Lufthansa could face claim of market abuse over GDS fee

Lufthansa could face claim of market abuse over GDS fee

The European Association of Travel Agents and Tour Operators (Ectaa) is formulating a claim of market abuse against Lufthansa over the carrier’s plans to impose a €16 GDS booking charge.

Ectaa believes it has grounds for an ‘abuse of a dominant position’ claim against the carrier on certain routes if it goes ahead with imposing the fee or Distribution Cost Charge (DCC) from September 1.

The association, which includes Abta, believes Lufthansa is open to the charge for levying the fee on routes such as Brussels-Frankfurt, Brussels-Zurich and Frankfurt-Zurich where the German airline and sister carriers Swiss and Brussels Airlines dominate.

Ectaa president Lars Thykier, managing director of the Association of Danish Travel Agents and Tour Operators, said: “I’m quite sure we can find evidence of market dominance.”

The association has already made a formal complaint to the European Commission alleging the charge will breach the GDS Code of Conduct. It expects a preliminary EC response next month.

Ectaa leaders met Lufthansa representatives last month to ask them to negotiate with the GDSs and postpone introducing the DCC. “We’ve had no response,” said Thykier.

Lufthansa intends to add the fee to GDS bookings as a surcharge along with fuel and other surcharges. Thykier said: “It’s a technical thing, but we are not sure Lufthansa can do this under Iata regulations. In Brazil, the authorities have said ‘You can’t do it’.”

The carrier confirmed last week that Brazil had joined a list of markets in which bookings would be exempt from the DCC from September 1. The list comprises Hong Kong, China, New Zealand, Iran, Libya and Yemen as well as Brazil.

Ectaa said the charge would “constitute a significant price increase for consumers and put all travel agents at a competitive disadvantage”. It dismissed the alternative distribution channels proposed by Lufthansa as “not efficient, viable alternatives”.

Travelport president and chief executive, Gordon Wilson, accused Lufthansa this month of “seeking to surcharge the entire indirect channel [when] it basically admits its portal is not fit for purpose”.

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