Oli20

just saw the headline on Bloomberg, will add more once available...

(The following is a reformatted version of a press release
received by e-mail from Deutsche Lufthansa AG. The release hasn't
been confirmed with the sender.)

Fliegen mit Lufthansa wird gunstiger
Absenkung der Ticket Service Charge auf lufthansa.com

Ab sofort wird das Fliegen mit Lufthansa gunstiger, denn die
Fluggesellschaft senkt die Ticket Service Charge (TSC) fur Online-
Buchungen im Internet unter www.lufthansa.com. Abh„ngig vom
Reiseziel betr„gt das Entgelt fur die Beratung und Ausstellung von
elektronischen Tickets 10 Euro bei innerdeutschen und europ„ischen
Flugen und 15 Euro bei Tickets fur Interkontinentalfluge. Bei
Buchungen am Lufthansa Schalter und im Lufthansa Call Center
bleibt die H”he des Serviceentgelts unver„ndert bei 30 Euro bzw.
45 Euro.

Lufthansa hat seit der Einfuhrung des Nettopreismodells am 1.
September 2004 die Serviceentgelte von Reiseburos und
Wettbewerbern beobachtet. Dabei hat sich gezeigt, dass andere
Fluggesellschaften und umsatzstarke Online-Buchungsportale
zwischen einer Buchung im Internet und uber den station„ren
Vertrieb differenzieren und online erheblich niedrigere
Serviceentgelte als Lufthansa erheben. Aus Sicht des Kunden ist
eine Online-Buchung fur die Airline weniger aufwendig als eine
Buchung am Schalter und er erwartet ebenfalls ein differenziertes
Serviceentgelt. Der Wettbewerb findet demnach nicht mehr nur uber
die Flugpreise, sondern auch uber die H”he des Serviceentgelts
statt. Mit der Absenkung der Ticket Service Charge passt sich
Lufthansa dem Markt an und steigert die Attraktivit„t der Website
www.lufthansa.com.


For further information, please contact:

Deutsche Lufthansa AG
Media Relations
Am‚lie Lorenz
Tel.: +49-69 / 696 - 92853
Fax: +49-69 / 696 - 6818
http://presse.lufthansa.com

Football Fan

Oh really? Surprise, surprise.

Show how little of a customer-centric view of the world LH seems to have. The "Serviceentgelt" is part of the "Flugpreis" to the consumer, what matters is the total end price! This artificial separation is ridiculous. What if every company that sells to end consumers started identifying their cost blocks and not including them in the marked up price they show?

Next time you buy a car, will you pay the "tire charge", the "windshield charge", the "cost of the company's ceo" charge, etc.?


It's okay that the fare is lower online, and it should be, but why the hell introducing something artificial like that anyway in the first place. As a consumer, I want to see end prices, period.

Football Fan

Oh, and of course, their website is not updated yet and still shows the 30 Euro "TSC". Great timing, really professional.

FS

I just checked lufthansa.com and tried an intra-germanflight. The result was 10 Euro TSC.... YIPPIEE!!!

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www.flykit.de - die deutschsprachige Vielfliegercommunity
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Oli20

Lufthansa to Cut Fees for Tickets Purchased Over the Internet

By Jeremy van Loon
Jan. 3 (Bloomberg) -- Deutsche Lufthansa AG, Europe's third-
largest airline, reduced service charges on tickets by as much as
30 euros ($40) for customers booking flights over the Internet.
The fee for domestic and European flights booked on
Lufthansa's Web site will be 10 euros, while the charge for trips
outside the region booked online will cost 15 euros, the company
said in an e-mailed statement. That compares with a 30 euro fee
for European flights and 45 euros for intercontinental travel
bought over the phone or at ticket counters, Lufthansa said.
Lufthansa is trying to boost the number of flights it sells
over the Internet to save on commissions it gives to travel
agencies. The Cologne, German-based company is also trying to
catch up to competitors such as Ryanair Plc, which sell most of
their tickets over the Internet.
Lufthansa Cargo is also cutting costs, including a 10 percent
reduction in its workforce through 2006, to increase profit after
rising oil prices and the weak U.S. dollar hurt earnings growth.
The company, effective today, also cut its fuel surcharge on
shipments by 14 percent. Fuel is one of Lufthansa Cargo's biggest
costs.
Shares of Lufthansa rose as much as 15 cents, or 1.4 percent,
to 10.70 euros and were up 0.7 percent at 10.62 euros as of 3:39
p.m. in Frankfurt.

fneumeier

What really annoys me is that for my international flights I almost every time I have to do the reservation by phone, because lufthansa.com doesn't give me the flights I need.

Example: MUC-ORD-STL. Lufthansa.com always routes via FRA, because it doesn't have the UA flights 8039 (or 8017 or 8011) in the system, as soon as you're trying to book not only 2 adults, but also a child in addition.

So, the choice it paying the adult rate for the child or pay the higher booking charge or make the deroute via FRA. Not really fair, because it's not my fault that I can't book online, eventhough I want to. And yes: I've used that argument on the phone, but still had to pay the higher booking charge ...

Maybe I'm angry about this also because I still doN't understand why I have to pay Lufthansa a fee for them selling me their stuff. Do I have to pay in the grocery store for the permission to buy their goods? And when doing it online: I'm even doing them a favor by saving costs. Why do I still have to pay for this?

DLSTR

I have been told the following about LHs ticket service charge.

LH in Germany, like most airlines in Germany up to fall 2004, paid a certain percentage to travel agencies as commission. AFAIK it was somewhere between 7 and 9 %, depending on the ticket. So the comission amount paid was rather high on Y,B,M Economy Class and Business and First Class Fares, while it was rather low on cheaper domestic and european flights.

LH wanted to reduce its distribution cost and decided to not pay a certain percentage anymore, but just offer its net fares. This is already the case in a lot of countries. I know it is definitly the case in Hungary, but heard about more countries, which just dont com to my mind anymore.

This basically means, that travel agents are not competive anymore, as they need to charge an extra fee on top of the ticket service charge.

However, therefor, and in order to let TA be competitive, they introduced what they called TSC = ticket service charge. According to LH this is not voluntarily, but to comply with a resolution by the Bundeskartellamt, to let travel agents stay in business.

To LHs defense, the usual fare increase on IATA fares in 2004 with Point of Sale Germany did not happen as in the years before, due to the introduction of the ticket service charge.

AFAIK, there is currently still a lawsuit against LH by the "Deutscher Reisebüroverband", which wants to have the old system back.

fneumeier

Okay, that's a fair point I was not thinking of. I still prefer fares that already include any extra costs instead of having commercial ads offering tickets for 19 Euros and in fact you're paying 45. But I guess I have to live with that ;-)

jreichel

The commission was only 5 % for domestic and European flights. Long-haul First and Business earned 7 % and long-haul Economy 9 %. These commissions were calculated before adding taxes. So, a cheapo domestic ticket of 99 EUR (about 55 EUR before taxes) awarded us less than 3 EUR commission. We subsidized that with the money we received for selling more expensive long-haul tickets. An international C or F ticket was very lucrative at that time. Now we typically charge between 40 and 55 EUR per ticket, which reflects the cost of doing so. Frankly, selling expensive tickets has become less fun, but on the other hand we don't get penalized for selling the cheapos.

I don't know if it's appropriate to do so in this forum, but here is a link to an interview I gave regarding the recent changes (in German):

http://www.media.nrw.de/magazin/arch...?id=2406&ak=36

If anyone feels offended, please let me know and I'll remove the link from this post, ok? I am posting this because I want to encourage everyone to at least consider booking with a TA when what they want is not available online. Granted, there are good and bad agents, but my claim is that a good and reliable TA is better than the LH call center (and typically costs only 10 EUR more). If you have been doing business with a TA in the past - give them another chance. Most of them are going out of their way now to prove that they are worth their TSC!


Absolutely true.


That's what they claim, but it's not true. Firstly, there is no such thing as a routine annual IATA fare increase in spring. That would be anti-competitive, wouldn't it? Secondly, LH did raise their domestic and European business class fares significantly because they now provide for an empty middle seat.

DLSTR

You are right about the increase in fares for domestic and european business class.

However, raising IATA fares would not be anti-competitive, as these fares are increased by IATA and, more importantly, still excempted from anti-competitive law. This is still from the old days, when airline fares were regulated by the governments. They also hardly make competition harder, as all airlines are allowed to price their own fares according to their individual will.

To be realistic, the homemarket airline has a big say in whether to raise the interlineable IATA fares, and this has not happend according to LH (with the excemption of the C-Class fares), while during the years before there has been some regular increases (though I am not sure, whether they were on a yearly basis)

PeterS

I found the information in the interview very helpful. Thanks for posting!

DLSTR

Just to validate my point.

The "Deutscher Reisebüroverband" (German Travel Agents Association) is asking the Bundeskartellamt (The German Anti-Trust Agency) to stop LH to reduce the TicketServiceCharge for online tickets, as this would throw travel agents out of business.

Sorry, the link is only in German
http://www.drv.de/presse_haupt681.html

Football Fan

They should have just kept the old system (before TSC) and should have offered a higher online booking discount and more online specials.

curt

What's the difference? From the consumer's point of view, LH originally increased fares by 30€ or 45€ respectively. They decided to do this by charging this so-called TSC (what a dumb name...). Now, would the situation be any different (from the consumer's point of view) if LH had just increased all fares by 30€ or 45€ respectively under the old system? Guys, you shouldn't be concerned about the TSC but about the price increase itself!

Football Fan

I don't like the price increase, but I also don't like misleading advertising.

What's the difference?

In Germany, if I see a quoted price of, let's say, 418 Euros for an economy flight to New York, I will assume that this is what I will have to pay. I don't like tricks like putting a little asterisk next to it and then somewhere I find out that it is 418 + 45. They got my attention undeservedly, and they might get business undeservedly because of practices like that. It's just not right. If you go and buy gas at the gas station, does it say "1 L = 22 c (and then somewhere with a little asterisk: +1 € taxes)? No, and neither should LH advertise anthing but the end price.