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GBTA: One-Half of Travel Managers to Cut Lufthansa Spending Over GDS ChargeAugust 27, 2015 By: Adam Leposa
A new poll by the Global Business Travel Association (GBTA) shows that 50 percent of travel buyers who currently include Lufthansa in their travel program as a preferred carrier plan to decrease spending with Lufthansa once this fee takes effect September 1.
Additionally, the poll showed 51 percent of all respondents definitely or probably will not use Lufthansa as a preferred carrier if the Lufthansa Group moves forward with the fee.
"GBTA continues to hold its position that this planned strategy will negatively impact corporate travel programs," the GBTA said in a statement announcing the poll results. "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."
Lufthansa announced the new "Distribution Cost Charge" (DCC) of EUR 16 back in June. Starting September 1, it will apply to every ticket issued outside Lufthansa's direct booking channels, including by GDS.
The change is part of an overall strategy shift by the Lufthansa Group airlines -- Lufthansa, Austrian Airlines, Brussels Airlines and Swiss International Air Lines (SWISS) -- that focuses on earning a greater portion of revenue from flight operations, as opposed to ticket sales. Presently, the costs for using GDS are several times higher than for other booking methods, such as Lufthansa's online portal at www.LH.com, LHG said in a statement announcing the decision.
The new surcharge has drawn criticism from several groups in the travel industry. Following the initial announcement, the Business Travel Coalition (BTC) announced that it would form AirChannelChoice.travel as a broad coalition of global stakeholders as a response to the new policy. The new coalition aims to advocate for travel distribution system choice for travel agencies and their customers.
"Their move effectively places them at a competitive disadvantage on airfare pricing," Liben said at the time. "Simply put, consumers who comparatively shop on price will pay more to fly on Lufthansa. For the vast majority of our clients, the economics will dictate that we book them either on other carriers that serve those routes or through codeshare partners."
Are you planning on decreasing spending with Lufthansa once the fee goes into effect? Let us know on our Facebook page or in the comments below.