US senators want action over Lufthansa distribution cost charge
Tuesday, 09 Jun, 2016
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A group of US senators have urged the transportation and justice department to investigate Lufthansa Group’s distribution cost charge for flight bookings made outside its direct booking channels.
Republican Sen. Mike Lee and Democrats Amy Klobuchar and Richard Blumenthal say the DCC, which was announced by Lufthansa a year ago, could violate anti-trust law under the 100-year old Sherman Act.
"On June 8, 2015, at a panel of the IATA conference with more than 100 executives from competing airlines in the audience, (Lufthansa CEO) Mr. Spohr announced that Lufthansa was planning to impose an $18 surcharge on price comparison websites," they said in a letter addressed to transportation department secretary Foxx and attorney general Loretta Lynch.
Later questioned about other airline reactions to his statement, Mr. Spohr said, ‘It’s a first step and I believe others will follow.’ Lufthansa’s conduct, encouraging competitors collectively representing the vast majority of the market to follow Lufthansa’s lead in raising prices, raises the question of whether they have run afoul of the Sherman Act."
They have urged officials to ‘thoroughly investigate and address it with an appropriate remedy,’ if it violates rules.
A Global Business Travel Association (GBTA) study last year claimed 42% of travel buyers had reduced the number of bookings with Lufthansa Group airlines as a result of the added charge.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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