If you think all airlines will lower their fees to encourage more bookings during the pandemic, think again.
Lufthansa Group sparked a trend among airline companies five years ago this month when it added a surcharge for bookings made in the classic travel agency reservation systems from Amadeus, Sabre, and Travelport. The German airline group said Monday it would hike that fee, doubling down on the tactic to drive more direct bookings.
The airline will boost the surcharge on tickets bought outside of Lufthansa group’s own channels for flights on Lufthansa, Austrian Airlines, Swiss, Brussels, and Air Dolomiti. Starting with bookings from October 1, the airline slaps on a $21 fee in the U.S. (€19 in Europe) surcharge, up from $17.50 (€16 in Europe).
In a message to agents, the airline blamed “the increase in costs” that global distribution systems Amadeus, Sabre, and Travelport charge agencies. The companies couldn’t be reached for further comment by our publication time.
Lufthansa, which has sought a state bailout, is looking for money wherever it can find it. The Lufthansa Group airlines have reimbursed around $3.2 billion (€2.7 billion) to 6.3 million customers for canceled flights due to the pandemic. It still has 1 million transactions left to settle.
Lufthansa has been unable to agree on new contract terms with Sabre and Amadeus for months, as Skift has reported.
Other airlines may not copy Lufthansa’s latest distribution move the way carriers like British Airways, Qantas, and Singapore did the last one. Many airlines are eager for agents to book tickets and don’t want to add charges that might deter them.
Raising fees can cause a backlash, as TripAdvisor witnessed when it added a fee to experiences bookings across its platform despite the crisis.
One of the airline groups that in 2018 copied Lufthansa’s move was Air France-KLM. But that carrier said earlier this week it had reached a deal with Amadeus to allow agents to book tickets via new processes it prefers for a smaller surcharge of only “a few euros” per ticket, less than the $13 (€11) fee per one-way ticket Air France-KLM has charged airlines.
Not everyone was a fan of Air France-KLM’s deal with Amadeus.
“Reading between the lines, the precedent Air France-KLM established with Amadeus appears to have an uncompetitive price tag for NDC [new distribution capability] bookings, given the unusual signal that they intend to apply a surcharge to NDC bookings via Amadeus unless, presumably, the agency agrees to modified economics,” said Cory Garner, the former head of distribution for American Airlines, on LinkedIn.
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Photo credit: A Lufthansa Airbus A320-200 at Frankfurt Airport. From October 1, tickets bought via third-parties tech for flights on Lufthansa Group airlines will be hit with a $21 in the U.S. (€19 in Europe) surcharge. Oliver Roesler / Lufthansa