The European Commission (EC), the executive arm of the European Union (EU), is currently assessing complaints by travel agents and CRS providers against Lufthansa Group’s GDS fee, sources within the EC tell Travel Agent. The case raises a number of complex legal questions, the sources said, and a decision will be taken as soon as the assessment is complete.
“We are aware of today’s media reports,” LHG said in a statement provided to Travel Agent. “However the EU commission is exclusively looking at the question, if the DCC-free booking-tool www.lufthansa-agent.com is in breach with the Code of Conduct for Computer Reservation Systems (CRS). Lufthansa is in discussion about this issue with the EU commission since two years already. A general investigation of the Distribution Cost Charge (DCC) is not subject-matter of the current discussions.”
LHG introduced a 16 Euro fee, called the Distribution Cost Charge (DCC), for every ticket issued by a booking channel using a GDS back in the summer of 2015. The fee applies to all LHG airlines – Lufthansa, Austrian Airlines, Brussels Airlines and Swiss International Air Lines (Swiss).
At the time, LHG argued that the fee was necessary because the costs of using the GDS were higher than for other distribution channels, such as Lufthansa’s website, call center or ticket counter. Travel agencies are able to book tickets without the DCC using the airline’s online portal at www.LHGroup-agent.com.
The new policy drew criticism from travel industry groups and travel agents when it was first introduced. Then-Travel Leaders Group CEO Barry Liben said that the move would effectively place LHG airlines “at a competitive disadvantage on airfare pricing.”
Since then, however, other airlines have moved to implement GDS fees of their own. British Airways and Iberia, which are both owned by IAG, introduced a GDS fee of 8 pounds per fare component back in May. That fee goes into effect November 1, although the two airlines also developed an NDC connection with TPConnects that travel agents will be able to use without paying the fee.
Similarly, Ukraine International (UIA) introduced a GDS fee of $9 per flight segment back in April. That fee applies to ticket sales agents that do not have a partnership agreement with UIA. To conclude one, a ticket agent can send a request to UIA’s head office. The option is free of charge and available to any agent, UIA said.
While American Airlines has not implemented a new GDS fee since LHG, in August the airline announced a plan to pay travel agents commission for booking through its Qualified NDC Channel.