The Podium: The effect of the 16 EURO GDS fee

Earlier this summer ACTA put out a member advisory to members with details of Lufthansa Group's (LHG) plan to charge a 16 Euro fee as of Sept. 1, for any bookings made on LH through a GDS.

ACTA was very frustrated to learn of this strategy because we feel now more than ever, a traveller should be able to rely on neutral and impartial advice of travel agents to find their way through the jungle of airline fares, charges, fuel surcharges and other ancillaries.

The LH strategy is another hidden cost passed on to the consumer in the form of an added tax, fee, or surcharge which for the travel agency is considered another Non Commissionable Fee (NCF), and will require you to collect and explain to your client the additional cost that is associated to booking through a GDS. As more items continue to get thrown into this "tax" line it makes fare transparency and comparison shopping more difficult. In fact, there is no comparison shopping possible when the consumer goes on the LH website.

While consumer protection, particularly during the NDC implementaion phase, is at the root of our concerns, Lufthansa's announcement to redirect a strategy to favour its own distribution channel goes in the opposite direction.

The following story was published on travelmarketreport.com. The story updates us on some of the trends being witnessed since the Sept. 1 implementation of the GDS fee.

STORY:
www.travelmarketreport.com
“Serious challenges” led Lufthansa to impose the Distribution Cost Charge, the €16 fee added to all GDS bookings, according to Juergen Siebenrock, vice president for the Americas.

The carrier is in the midst of a top-to-bottom re-examination, akin to an “in-house Chapter 11 process,” he said at The Beat Live, a business travel conference, in Washington.

Siebenrock sat in “The Hot Seat,” a tradition at the conference in which an industry figure answers questions from readers of The Beat and members of the audience about a controversial topic – and few topics at the moment are more contentious than Lufthansa’s fee, which went into effect Sept. 1.

Bank 2015 Technology Conference on Sept. 16, he commented on the impact of Lufthansa's Distribution Cost Charge. "In many cases, the travel agents and the corporation have said they are going to an alternative rather than pay that," he said. "It's essentially a fare increase, and on those segments where there's competition, they've said they will move those to other competitors. If they do, and we expect they will, those flow through the GDS as well. It still comes through the GDS, and Travel Network, Sabre's business, will still get its fair share of that. We don't see any impact in the short or medium term on our bookings." FULL STORY