ALEXANDRIA, VA — Lufthansa Group this week implements a 16 euro surcharge for GDS bookings but the move could come back to hit the company.
A poll of Global Business Travel Association (GBTA) Members shows 50% of travel managers who currently include Lufthansa in their travel program as a preferred carrier plan to decrease spending with Lufthansa once this fee takes effect.
Additionally the poll showed 51% of all respondents definitely or probably will not use Lufthansa as a preferred carrier if the Lufthansa Group moves forward with the fee.
As a voice for the business travel industry and the corporate travel buyer, GBTA continues to hold its position that this planned strategy will negatively impact corporate travel programs. It is a direct price increase to managed travel programs with no corresponding benefit. It could also ultimately lead to decreased price transparency if carried out by not only Lufthansa, but other airlines in the industry.
Meanwhile, the airlines of the Lufthansa Group – Austrian Airlines, Brussels Airlines, Lufthansa and SWISS – say they have reached a major milestone in developing new ‘direct connect’ booking channels.
“The market is clearly ready for innovations and developments of this kind,” said Jens Bischof, Member of the Executive Board and Chief Commercial Officer of Lufthansa German Airlines. “Our realignment of our distribution has prompted an intensive exchange of views and experiences within our industry.”
“This process has had its share of controversy, too,” Bischof concedes. “But we are still as convinced as ever that offering advanced and, at the same time, substantially cheaper additional booking channels – that also allow us to better present our products – is in our customers’ best interests. And that’s why we consistently pursue the further development of our distribution channels.”
As planned, the airlines of the Lufthansa Group are now taking a further major step in implementing their new commercial strategy by ensuring that from this week (Sept. 1), the costs of bookings made via global distribution systems (GDSs) “are met more fairly and transparently by the users involved. To this end, a new ‘distribution cost charge’ (DCC) of 16 euros will now be applied to any ticket issued via GDS”.
Customers of the Lufthansa Group can obtain their tickets without having to pay the new DCC by making their bookings via the member airlines’ websites, via an airline service center or at an airport ticket desk. Travel agents may also use the dedicated LHGroup-agent.com online portal as a booking alternative, said the carrier.
Corporate customers can continue to make their bookings at their individually-agreed contractual rates (i.e. with no DCC) via LH.com. Lufthansa has also concluded a new agreement with technology provider Concur, an SAP company, under which Concur will provide the Lufthansa Group’s corporate customer travel management units with special programs for managing these LH.com bookings from next year onwards.
“We want to work together with the travel agents and the global distribution systems to make the sale of air tickets more up-to-date, more inexpensive and more customer-minded,” said Bischof. “And to this end we have swiftly developed a range of IT solutions that will be offered to our customers in the near future.
“The airlines of the Lufthansa Group have been particularly active devising solutions together with key technology partners that will enable them to develop and offer new ‘direct connect’ booking channels. Parallel to this, the airlines are working on providing booking platforms for key-account corporate clients which will give them and their corporate travel agencies direct access to the air travel products of the Lufthansa Group.