Lufthansa GDS Fee Likely to Stick

Lufthansa appear unlikely to waive the fee which has received criticism from agents and TMCs across the globe, says AFTA ceo Jayson Westbury.

Lufthansa is unlikely to step down on plans to charge a 16 Euro fee for product sold through the GDS, with LH boss lufthansa low resCarsten Spohr standing his ground on the bold move at the IATA agm last month.

Lufthansa last month announced the surcharge as part of a new commercial strategy aimed at pocketing a greater portion of revenue of ticket sales which have been “compromised over time”. In a statement released last month, Lufthansa claimed that the airline is now paying “three digit million Euro” in GDS charges, with the traditional channel costing “several times higher than other booking methods”.

The fee will apply for every first ticket issue for LH, Austrian Airlines, Brussels Airlines and Swiss International Airlines flights from 1 September, but not for tickets purchased via the websites of the individual carriers.

At a media event in Sydney last month, AFTA ceo Jayson Westbury said the carrier appeared unlikely to waive the fee which has received criticism from agents and TMCs across the globe. To the contrary, he said Spohr was rewarded by a standing ovation at the IATA agm from attendees – including airline chiefs – who considered it a “courageous” move.

Spohr has openly expressed his disappointment with GDS technology, claiming customers are “not happy with what they get…we don’t have enough of the profit in the value chain. Others in the industry have more,” he told the agm in Florida.

Other airlines reportedly shared his view, and a poll of IATA members showed that most carriers would “consider” following Lufthansa’s lead. But it remains to be seen whether they will, in fact, follow suit.

The topic has come to the foreground before, with Northwest Airlines rolling out fees on agency bookings made through a GDS back in 2004. However, just 10 days after announcing the move, the airline backed down following staunch criticism from GDS companies and travel agents who claimed they would shift bookings from the carrier.

Lufthansa general manager Australia Anil Rodricks conceded that the fee has ruffled the feathers of agents and TMCs, but told travelBulletin that “GDS costs are high and need to be factored into the distribution chain”.

Heralding the fee as a necessary step for the airline, he denied that the level would be a competitive hurdle for LH. 

He added that agents were more concerned about the implementation of the levy and repercussions for customers than the fee itself. “We have assured the trade that the implementation process will be advised well in advance,” he concluded.

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