LUFTHANSA has not caved in to
industry pressure, implementing
its controversial Distribution Cost
Charge (DCC) surcharge on September
1. However, travel agents will not be
deterred from booking via the GDS,
passing on the fee to customers.
The airline group dropped the
bombshell in June that it would
implement a fee of €16 (R242) for
every Lufthansa ticket booked via the
GDS. Agents had just three months to
prepare for the change, with Lufthansa
encouraging the trade to bypass the
GDS and book through the airline’s
agent portal – an option that is “just
not feasible”, South African agents say.
Agents are not prepared to disrupt
their workflow, leaving the GDS to book
via Lufthansa’s agent portal. This would
drastically impact on the travel agent’s
efficiency, says Franz von Wielligh, gm
of Flight Specials.
“Imagine if we needed a separate
portal for every airline? What a
disaster,” says Jonathan Gerber,
director of TAG. He says TAG’s
consultants will not be using the agent
portal as it is simply unproductive
to have to use a myriad of different
booking tools.
One element that separates ITCs
from traditional agencies is their
24/7 availability, says Tammy Hunt,
operations director for eTravel. “The
DCC system will limit this service and
I do not believe that the majority of the
clientele the ITCs service will be willing
to forego the exceptional service they
receive from their consultant,” she
says.
For online travel agents, Lufthansa
has not even proposed a solution,
says Andy Hedley, head of technical
business at Travelstart. He says the
airline’s agent portal might work for
traditional agents but it can’t be used
on online portals. He says currently
most agents are adopting a “wait and
see” approach.
The airline has made very little effort
to engage with the trade, says Allan
Wolman, md of XL Rosebank Travel.
“We will certainly not be using their
web portal and will be transparent with
our clients, advising them how much
extra it will cost to book Lufthansa.”
However, this doesn’t mean agents
will boycott the airline. “We can’t
boycott them. That would be selfdefeating.
We need them as much as
they need us,” says Allan, adding that
ultimately the choice will be up to the
client.
Jonathan agrees and says Lufthansa
will now be that little bit more
expensive for customers. He appeals
to the trade to stand together and pass
the DCC on to clients to put pressure
on Lufthansa. “We need a distribution
system that is easy to access and has
ample content. I sincerely hope that
Lufthansa’s numbers will drop. If not, it
will send a message to other airlines to
do the same.”
Franz believes supply and demand
principles will bring Lufthansa fares
back in line with the market. “It will be
interesting to see over the next few
months if Lufthansa will drop its fares
to compete for lost bookings, which
then would make this whole exercise
redundant.”
Loopholes
Travel agents wanting to bypass the
Distribution Cost Charge could opt to
book a Lufthansa flight with one of
the airline’s codeshare partners, said
Dave Hilfman, United Airlines’
senior vp of worldwide sales,
at a recent ASTA Global
Convention.
In South Africa, travel agents
can sidestep Lufthansa’s
DCC by booking via SAA.
Spokesperson for SAA,
Tlali Tlali, told TNW: “At this
stage, it is only Lufthansa
that is collecting a DCC. SAA
does not charge this for SA
operating and/or SA marketing
flights.”
Larry Ryan, Lufthansa’s
director of marketing,
distribution and sales
programmes for the Americas,
admitted that travel agents
could bypass the charge
by ticketing on Lufthansa’s
codeshare partners, as long
as at least one leg of the
codeshare itinerary was
operated by the plating carrier.
He warned, however, that
when booking flights through
a codeshare partner, certain
Lufthansa services might not
be available, such as premium
economy, seat requests and
special meals.
