Lufthansa to charge for GDS bookings
Lufthansa Group dealt a blow to global distributions systems today when it announced that it will introduce a €16 charge for every ticket issued via a GDS.
In an attempt to drive bookings through its own website, the German carrier said the charge would apply to all bookings made via any GDS for flights with Lufthansa, Swiss, Austrian and Brussels Airlines from September 1.
It said agents could avoid the new ‘Distribution Cost Charge’ or NCC by booking direct on www.LHGroup-agent.com.
The charge won’t be added to tickets booked direct on the airlines’ other websites, ww.lh.com, swiss.com, Austrian.com or brusselairlines.com or at airport ticket counters.
Announcing the new charge, Lufthansa Group said: "Presently, the costs for using GDSs are several times higher than for other booking methods, such as our own online portal www.LH.com.
"In total, the yearly GDS costs come to a three-digit million euro amount for the Lufthansa Group. These services, however, 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."
The DCC will be introduced at the same time as Lufthansa’s new economy fares, which will be split into ‘Light’, ‘Classic’ and ‘Flex’.
Amadeus criticised the DCC, saying it would penalise travellers based on the shopping channel they use.
"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 LHG, 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," it said.
"Also, 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."
Lufthansa admitted the technology of its existing sales systems cannot adequately display all of its ancillary services and enhanced price options, so it is in the process of developing a new booking method to enable agents to connect to its IT systems directly based on the new IATA data standard New Distribution Capability.
The first NDC pilot project is currently being tested at Swiss and should begin at Lufthansa this year, it said.
CCO Jens Bischof added: "At present, airlines are not yet able to market their services via all sales channels, as it is common in other industries. The contracts and structures have previously prevented any deregulation in many areas. We want to change this with our new commercial strategy and take advantage of greater degrees of freedom in our sales activities, providing our customers with the exact tailor-made services that they are looking for and wherever they are looking for them."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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