Lufthansa GDS fee poised to start as agency group declares non-cooperation

Lufthansa GDS fee poised to start as agency group declares non-cooperation

Lufthansa will charge UK agents £11.30 per GDS booking from Tuesday as it remains committed to transforming distribution by imposing a worldwide Distribution Cost Charge (DCC).

The carrier’s UK regional director, Christian Schindler, hailed the €16 charge as “a game changer”.

Confirmation of the DCC in sterling came as the European Commission was poised to receive at least two further complaints against Lufthansa.

Meanwhile a leading group of corporate travel agents began a policy of non-cooperation with Lufthansa this week.

The 66 members of the Advantage Focus Partnership told Lufthansa and group carriers Swiss, Austrian and Brussels Airlines of the move in writing, as Advantage corporate director Ken McLeod declared: “This fee is unacceptable in its current form.”

He warned: “Make no mistake, the distribution network in its current form will be irreparably damaged by differential pricing on this scale by a major airline.”

He added: “If successful, this will be replicated across the airline industry.”

The group’s policy of non-cooperation began “with immediate effect” and means no training, marketing, sales calls, events, fam trips or “similar activities” with Lufthansa group airlines.

The Advantage Focus Partnership members have a single commercial contract with Lufthansa.

McLeod stressed that Advantage members outside the Focus Partnership were not part of the policy and do not necessarily endorse the group’s stance.

He said the GDS booking fee represented “a drive by Lufthansa to discriminate against travel management companies and the wider agency community by imposing a differential pricing structure between the GDS and their own trade website”.

McLeod insisted: “Members of the Advantage Focus Partnership will continue to sell Lufthansa flights as per clients’ wishes, and dialogue will continue with the airline’s senior management but only through Advantage central office with the Focus Partnership negotiating team.

“We are mindful that our clients’ wishes are our members’ priority. However, many of the Focus Partners have been discussing this iniquitous charge with their corporate accounts, so everyone should be aware of the impact, the additional processes and procedures, and the costs which could be incurred.”

Referring to feedback from members, McLeod said: “We didn’t want any agent influenced by another’s opinions, but the overwhelming outpouring has left us in no doubt as to members’ feelings.

“In itself, this move may not deeply harm Lufthansa. I liken it to putting a protest placard outside the airline’s HQ to indicate our concern that this move will eventually have a domino effect on the industry.

“We’re not oblivious to the challenges Lufthansa faces, especially in the European short-haul market. The trade has to take some responsibility in trying to rebalance the cost of distribution, and that includes agents and the GDS.

“However, Lufthansa has signalled its intentions to drive change in the market without consultation, without a properly thought-out strategy and without understanding the processes that are inherent to business travel.

“In the process, it will fundamentally damage the clients on which it relies for its most-profitable sales.

“There is no inherent benefit to any part of the distribution chain, whether GDS, agent or client, and we would expect our principal airline partners to make processes easier rather than more difficult.”

The European agents and tour operators’ association Ectaa submitted a complaint earlier this month alleging the charge would breach the EC computer reservations system code of conduct.

It is understood the European Technology and Travel Services Association (Ettsa), which represents the major GDSs and online agents, is poised to make a similar complaint, while at least one GDS is formulating a complaint of abuse of market dominance. Ettsa declined to comment.

Lufthansa expects the fee to hit sales of lower-class fares, but Schindler insisted: “Our bookings are strong. Only after September 1 will we find out who is charging [the DCC] and who is absorbing it.”

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