BRU2m10

No English news yet. But news reports state that Lufthansa, Swiss, Austrian, Brussels will charge a 16€ fee for bookings throug a GDS as of September 1st.

FR: http://www.quotidiendutourisme.com/s...gds-87711.html
DE: http://derstandard.at/2000016821263/...ei-GDS-Buchung
NL: http://www.tijd.be/ondernemen/luchtv...&ts=1433245925

jspira

Here is information in English:

Lufthansa Group Plans €16 Surcharge for Third-Party BookingsAbove from Frequent Business Traveler, where I serve as ed.dir.

BristolTraveller

It's like Lufthansa Group are trying to out-Ryanair Ryanair.

rcs85551

Essentially, one could argue that their move is designed to steer the passengers away from booking Lufthansa through other sales channels than their own, especially when it comes to online bookings.

The surcharge will very likely ensure that any Lufthansa flight will most likely show up with lh.com (or the respective LH Group website) as the cheapest option in all the meta-searches, since everyone else will get hit by the GDS surcharge.

At the same time, they hit their traditional "offline" travel agency sales partners with a surcharge which many travel agencies most likely will not be able to pass on to their low-budget customers - the traditional "offline" travel agencies focusing on short- and medium-haul travel will certainly have to struggle with the surcharge.

airoli

What about OTAs like Expedia, Priceline and eDreams (Opodo)? Will they have to pay the fee as well? I assume that these OTAs have direct connections to the LH Group, rather than going via a GDS.

Also, do we know which POS this fee applies to?

Rambuster

I guess companies booking primarily business travel will suck up the €16 fee for complex tickets or ask their TA to use the LH gateway for travel agents for simply P2P tickets.
TAs with a lot of budget concious customers will surely suffer (once again).

warakorn

I would guess that the EUR 16 fee needs to be paid extra when booking on Expedia and co.

The EUR 16 will be probably charged in addition to the existing ticket service charge.

dj_jay_smith

Surely this would be considered anti-competitive by the EU and other similar agencies?

Booking.com recently got fined by the EU by forcing all of their hotel partners to always have the cheapest rate on their website, and not allowing them to publish cheaper rates on other channels.

So surely by forcing your competitors to pay more for providing the same service is anti-competitive? As you are effectively forcing them out of business, as they could never possibly compete.

miikkak

This is completely different situation because Lufthansa has to pay Sabre, Amadeus etc to distribute fare information. It's more like a hotel decides that booking through booking.com should be more expensive than directly through hotel's website because the hotel has to pay commissions to booking.com.

There is no way EU could consider this as anti-competive if Lufthansa provides fare information for free to Skyscanner, momondo and other metasites.

I think medium-sized OTAs lose the most if implemented. Expedia, Opodo etc can afford APIs and small travel agencies can provide tailored services.

Calchas

They do not have a "direct feed"; or rather the GDS is their direct feed. It is them at whom the rate is targeted.

See the BBC coverage: http://www.bbc.co.uk/news/technology-32990724

One might imagine that particularly valuable corporates would get a discount or rebate on this charge. Probably the discount TAs are not really of much value to LH.

On what basis? I think you need to flesh out this argument a bit more.

But travel agents are not competitors with LH. They are distributors.

You would have to argue that this fee was distorting the market, I imagine.

Calchas

There have been no suggestions the fee is restricted by PoS.

airoli

Having read up a bit on LH's official presentation , it seems indeed as if OTAs will have to pay the fee (i.e. it will be baked into the fares they can access) unless they switch to a direct connection to LH Group.

And it seems that this will be implemented to all global POS except Hong Kong, Iran and Libya.

Calchas

^ Thanks for the extra information.

dj_jay_smith

I would argue that Lufthansa are practising discriminatory pricing.
They compete with Travel Agents to sell tickets, holidays and other travel products to end customers. Some of these (most) will be Lufthansa group own services, some will be by other providers (code shares, partners etc.)

If LH group then puts the TAs at a disadvantage to selling the same products as the prices are higher to order via this channel than other to come direct to LH then they are driving business away from the TAs and towards themselves, thereby discriminating against such channels and forcing these other agents out of business by this practice.


Looking quickly for EU law in this area (this is not a full review or detailed search!) I found the following

Article 82(c) of the Treaty considers as an abuse the fact for one or several firms holding a dominant position of “applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage”

Calchas

There's an argument there I agree.

It will be interesting if this goes to court.