Formal complaint issued against Lufthansa GDS fee

Formal complaint issued against Lufthansa GDS fee

A formal complaint has been filed in Brussels against Lufthansa Group’s controversial €16 GDS fee.

The European Technology & Travel Services Association (Ettsa), which represents global distribution services and online travel agents, is claiming a breach of key provisions of the EU's code of conduct on computerised reservation systems.

The complaint to the European Commission covers the German airline and its associate carriers, Austrian Airlines, Swiss and Brussels Airlines.

The complaint was filed to the Commission's Directorate General of Mobility and Transport, which holds enforcement powers on the code of conduct.

The Distribution Cost Charge was imposed from September 1, with Ettsa claiming Lufthansa and the main airlines under its control are now discriminating against those customers who use independent travel agents to book their tickets by adding €16 to the ticket price.

Ettsa's secretary general, Christoph Klenner, said: “The only way for travel agents to avoid the discriminatory surcharge is to switch from traditional GDSs to an alternative platform controlled by Lufthansa, where only such content is shown that Lufthansa chooses to show.

"In addition to taking travel agencies hostage and forcing them to spend unnecessary resources on the switch to Lufthansa’s platform, Lufthansa’s move will severely hurt comparison shopping and competition.

"Ultimately, this will lead to a more restricted choice and increased prices for consumers who will become increasingly captive.”

He added: “That Lufthansa wants to compete with GDSs and travel agencies is not a problem for Ettsa. On the contrary, Ettsa welcomes new competitors in travel distribution.

“However, there are rules to follow if you want to be in this business and those rules do not allow the sort of discrimination that Lufthansa is using to push its competitors out of the market. If Lufthansa wants to run a GDS, it needs to follow the rules for GDSs.

"The EU code of conduct was designed precisely to prevent abuse by airlines who control GDSs. Therefore, the European Commission has a duty to step up and intervene in the interest of continued transparency and consumer choice,” Klenner concluded.

Lufthansa chief commercial officer, Jens Bischof, introduced the charge saying: “We need to increase our profits. The costs for using GDSs are higher than for other booking methods.”

The carrier objects most to the incentive payments GDSs make to larger agents. Bischof said: “We’re not willing to pay the bill any more.”

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