Lufhansa Group is planning to charge a fee of 16€ (about $17.60) for all tickets booked anywhere except through its own websites and counters. The airline group claims it needs that money to offset the cost of processing tickets bought through online and other travel agencies.
Lufthansa Group also includes Swiss Airlines, Austrian Airlines, Brussels Airlines, Germanwings and Eurowings. Their calling the fee a “distribution cost charge.”
What it’s about is this: When you buy a ticket through Expedia, or Cheap0Air or any of the others, including brick-and-mortar agents, the ticket is processed through a “GDS” or Global Distribution System. These are networks that handle automated transactions connecting travel agents with available tickets and more on an airline or hotel-company database. The big three of the business are Sabre, Amadeus and Travelport. Each takes a fee out of each ticket handled.
Lufthansa’s complaint is that while its share of ticket revenue has been dropping, the GDS share has been growing. Lufthansa argues that the GDS companies are no longer needed, and that, in fact, the airline can do a better job on its own. Given that, it says, it will no longer absorb the GDS share, and will pass it on to the customer as a fee.
Not new; Lufthansa tried it in 2008 but couldn’t make it stick. Let’s see what happens this time.
Photo: Bjorn Erik Pedersen / Wikimedia
It seems a huge and unfair fee.
I can’t believe a company with Lufthansa’s finances really needs to impose something so draconian. And if they do, I think their business will suffer. As we all know, consumers are very price sensitive.