Lufthansa GDS Fee Latest in Battle for Direct Bookings

codeLufthansa's controversial decision to charge a fee of 16 euros for tickets booked using a GDS is the latest in a push by many airlines to encourage bookings through direct channels, such as airline websites and call centers. 

Last August, American Airlines briefly removed its flights from Orbitz during a fee dispute, reports the BBC

According to an analysis in the New York Times, Delta pulled its flight information from TripAdvisor last year and from some European online travel agencies this year. Encouraging fliers to book direct allows airlines to avoid fees associated with third-party bookings, as well as offer lucrative add-ons. 

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"Where a significant portion of Delta's profits come from is ancillaries after you buy the basic transportation," Max Rayner, a partner at travel industry consulting company Hudson Crossing, told the Times. "That's one big reason for Delta to be hellbent on denying access."

The drawback? Critics say that making it more difficult to shop for airfares on third-party sites will make it more difficult to compare airfares, leading to higher prices for consumers. 

"Heightened attempts to lead travelers away from online travel agencies and metasearch travel sites is likely to lead to higher average airfares, increase consumers' search costs, make entry into city-pair routes by smaller airlines more difficult, reduce transparency, and strengthen the market power of the major airlines," said a Travel Technology Association report cited by the BBC. 

Agents Respond

The new fee from Lufthansa has drawn criticism from a broad array of travel agency groups, including Travel Leaders Group, the American Society of Travel Agents and Ensemble Travel Group

Agents have also been chiming in on our website and on our Facebook page

"That's ridiculous," says Margie McKay. "Penalize your customer for using a professional travel agent?"

Mandy Mathis says, "I won't sell them anymore. By Lufthansa, Swissair, Austrian and Brussels air. Would rather sell another airline now."

The EUR 16 DCC was announced June 2 in a move Lufthansa Group (LHG) said was part of a broader shift in commercial strategy to earn a greater portion of revenue from flight operations, as opposed to ticket sales. LHG said that costs for using GDS are several times higher than for other booking methods, and that LHG was in the process of developing a new booking method to enable sales partners to connect to their IT systems directly based on the new IATA data standard NDC (New Distribution Capability). The first NDC pilot project is currently being tested at SWISS and should begin at Lufthansa during the course of this year, Lufthansa said. 

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