Published on Thursday, August 18, 2011
The Global Business Travel Association (GBTA) has warned that Lufthansa's new credit card charges for GDS bookings will damage its relationship with buyers because of increased cost and reduced transparency.
The association’s advocacy group, which met last week to discuss the latest announcement by the German carrier, will be investigating some of the detailed implications of Lufthansa’s credit card charge.
Under consideration is the question of where the charge will be displayed during the booking process.
GBTA Europe Advocacy Group chairman Hans Ingo Biehl said, “We have seen these credit card charges being introduced sporadically across Europe by carriers in the last few years. The Lufthansa move adds considerably more cost and confusion to buyers in the markets affected.
"We understand airlines re-visit business models but our primary concern is whether these charges are only presented at the end of the booking when by rights it should be at the fare comparison stage at the beginning of the booking process.
"We also think it very critical that these changes may have implications to contracts in the middle of existing contractual periods. This will naturally form part of our feedback to the European Commission as part of their review of ancillary fees.”
GBTA Europe believes that, as most corporate relationships with intermediaries and airlines are based on pre-determined payment methods, it should be easy for the distribution system to factor in the credit card fee at the shopping phase of the booking, allowing fully transparent pricing.
The association is recommending members ask the airline and distribution systems to load the cost at the beginning of the booking stage. It is also suggesting that buyers bring the cost of these fees into future negotiations with the carrier.
GBTA plans to survey its members on this issue for presentation to the European Commission later in the year.
By Linsey McNeill
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The recent insolvency of Low Cost Travel Group, one of the large players in the travel industry had a big impact on the travelers, hotels and all related players from both wholesale & retail arms. There were about 27,000 people on a holiday who had booked through the company comprised of a €200 million wholesale arm and €500 million OTA / retail arm.