Lufthansa claims its latest fee will help passengers like you. But it will do the exact opposite.
Let’s pull the curtain back a little on the insider world of travel.
No doubt the reaction of many readers of this post will be to ask, “What’s a GDS?” And these days, consumers are so accustomed to fees, what’s one more anyway?
First, a little background for the uninitiated. GDS is the abbreviation for Global Distribution System, and it has been the reservation system used by travel agents since the automation process began in the 1970s.
Travelport, Sabre and Amadeus are the main GDSs currently in use. And, their age shows. When a “civilian” sees me use the system, they are often stunned by how old-fashioned it looks. A GDS is unwieldy, archaic and, yet, a great equalizer.
What a GDS does do is allow travel agents, and OTAs (online travel agents, such as Expedia and Priceline), to compare multiple airlines and fares. Travel agents can thus offer consumers the best price, and online buyers can compare prices. This comparison shopping process could take hours if the alternative is checking each airline’s website for even a simple ticket.
Now, GDS’s do charge airlines for bookings, which the airlines complain about vociferously, although my sense is that having to be competitive is the real cost. When all airlines are displayed in one system, it’s obvious if one airline is more expensive than others.
For years, airlines have occasionally offered specials on their own websites, which are sometimes — but not always —available on the GDS. In addition, some budget carriers — Easyjet, for example — make a point of ONLY allowing bookings on their own websites.
With the larger airlines, however, the usual tactic to prevent travelers from booking with a travel agent (brick and mortar or OTA) has been to offer bonus miles.
However, this change, which Lufthansa has announced will take place in September 2015, is potentially one of the most unfriendly to travelers. And, depending on the reaction and results, it could get much worse.
Lufthansa’s new program will be different. They will charge a flat (for now) €16 surcharge for any reservation booked through any GDS starting in September. The fee will show as part of the ticket price.
The airline, and its affiliated Lufthansa Group airlines, SWISS and Austrian, will allow travel agents to book on Lufthansa’s own website without the surcharge. But realistically, from a travel agent’s point of view, it’s not only cumbersome to book in another system, it’s more difficult to manage those bookings.
Not to mention that searching for fares in a GDS, then going to another site for the actual booking, adds all kinds of potential for things to go wrong. Typos can happen, prices can change, and airlines tend not to be forgiving of these things.
There’s no word yet as to what happens when a Lufthansa flight is booked on a combined fare with another carrier. For example, United fares often require taking other flights within Europe. And, for that matter, what if a Lufthansa fare is booked as a United codeshare, i.e., with a United flight number?
At €16, my sense is that most agents will simply stick with business as usual, although they may steer very price-sensitive clients directly to Lufthansa’s website. Agents could also charge an additional fee for booking tickets on Lufthansa’s website.
On the other hand, €16 is no doubt only a starting point. If Lufthansa doesn’t get pushback, it seems likely that other airlines may follow, and that fees will go up. More importantly, the ability to comparison shop will suffer.
One thing that’s certain is that there’s no way this will benefit consumers.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
