Agencies threaten Lufthansa with GDS fee injunction
With the introduction of the Lufthansa GDS surcharge less than fortnight away, details are emerging of some of concerns and threats being made behind the scenes.
Yesterday, a group of European online travel agencies issued a statement to outline their opposition to the Euro 16 fee being levied on all tickets secured via intermediaries using the Global Distribution Systems to obtain fares and make bookings.
The OTAs signing the plea include two of the big guns in Europe, Lastminute.com Group and eDreams Odigeo, alongside Travelgenio, Travelplanet24, Travix (run by BCD Travel), Unister Travel, e-Travel and Etraveli.
Whilst there was no suggestion of a boycott in the statement, it has now emerged that in the background the eight agencies have been far more forceful in their opposition.
In a Wednesday 12 August letter obtained by Tnooz to Lufthansa Group CEO and chairman, Carsten Spohr, UK-based law firm Simmons & Simmons representing the eight OTAs has demanded the surcharge be scrapped by Friday 21 August.
The firm’s partners Koen Platteau and Peter Broadhurst write that they will, if the surcharge is not withdrawn, consider “all further action” to prevent its introduction.
This may include:
· Formal complaints to European Commission regulators.
· Formal complaints to local or regional competition authorities.
· Applying for “injunctive relief” in the courts (a legal move to halt proceedings).
The agencies claim the airline group (which includes Austrian Airlines, Brussels Airlines and Swiss International Airlines) is “trying to eliminate OTAs and CRSs” (GDSs) and replace them with what they call an “inefficient model”.
The letter continues:
“The Lufthansa Group is attempting to return to a deregulated era, prior to the entry into force of the CRS Code of Conduct, where carriers were able to control travel distribution in a monopolistic way.”
“The Lufthansa Group seems to be intent on misusing the CRS Code of Conduct to achieve strategic, self-serving goals that are contrary to its spirit.”
The agencies also highlight how the proposed charge will be implemented with reference to interlining with other carriers, an “essential feature of a GDS”.
“Most importantly, the Lufthansa surcharge would travel agencies – and so consumers – from comparing prices of all carriers through a single platform – the very capability the CRS Code of Conduct is designed to ensure and protect.”
The letter also highlights how a “informal” show of hands at an IATA meeting in June indicated “explicit approval” of the Lufthansa move – a sign, the agencies claim, other airlines would consider following suit.
Privately, some agencies are concerned that if the Lufthansa move is implemented by many other airlines then it will have a disastrous effect on online travel agencies, beginning with carriers letting their current full content agreements expire.
One high profile agency executive says it could “be the end of the OTA model for flights”.
“Then airlines, instead of paying commissions, overrides and segments fees, will have to pay CPCs and CPAs to the metasearchers and search engines.”
But there is a strong resistance movement of sorts growing, the executive says, with OTAs angry for not only “allowing Lufthansa to get away with this but because it directly threatens our business model if other airlines follow”.
Lufthansa has yet to respond to requests for comment.
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