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Lufthansa seeks to take more control over ticket sales
[FRANKFURT] Germany's Lufthansa will levy from September a 16-euro ($18) surcharge on tickets not booked through its own websites and other direct sales channels, in a bid to boost the amount it earns per ticket, it said on Tuesday.
Airlines have been trying to regain control of their ticket sales, especially as they try to make more money by unbundling services and charging passengers separately for luggage, seat requests, food and other amenities.
Lufthansa said on Tuesday the percentage of revenue it generated from the sale of flight tickets had been steadily decreasing at a time when its costs to use global distribution systems (GDSs) - which enable travel agencies to book flights, hotels and car rentals with the primary service providers - were running at over 100 million euros a year.
Lufthansa said these costs include paying for some GDS services which are only partly used by its airlines and therefore a new "Distribution Cost" surcharge of 16 euros will be levied on every ticket issued by a booking channel using a GDS. It added that travel agencies would be able to book tickets without incurring the surcharge by using Lufthansa's own online portal, www.LHGroup-agent.com.
"While other service and system partners in the (GDS) value chain are recording increasing margins and returns, our airline's earnings have been compromised over time," Lufthansa Chief Commercial Officer Jens Bischof said in a statement.
Lufthansa is fighting to cut costs and improve profits in order to pay for new planes and battle competition from low-cost rivals and fast-growing Gulf carriers. It has seen a steady fall over the past year in yield - the average fare paid per passenger carried and kilometre flown.
In addition to the ticketing shake-up, Lufthansa is also set to introduce new ticket prices this summer, which will see economy class fares classified as "light", "classic" and "flex", depending on whether passengers want to pay for just a full ticket or have other options included.
Other airlines have also taken steps to tighten their grip on ticket sales. IAG airlines British Airways and Iberia, for example, briefly withdrew their tickets from sale via a website run by online travel group eDreams.com last year.
Lufthansa's decision, which also affects tickets for flights operated by group airlines Austrian, Swiss and Brussels, drew ire from global distribution system provider Amadeus IT .
Madrid-based Amadeus, which competes with Sabre and Travelport, and has a market share of just over 42 per cent, said the decision would penalise travellers as any higher IT costs incurred by travel agents could be passed on to customers.
"This new model will make comparison and transparency more difficult because travellers will now be forced to go to multiple channels to search for the best fares. Ultimately, the industry overall stands to lose from this distribution model," it said in a statement.