Lufthansa Faces New Antitrust Allegations in Europe

The European Technology and Travel Services Association (ETTSA), a lobbying organization for online travel companies and global distribution systems, has asked the European Commission to investigate Germany’s Lufthansa Group over what it called “discriminatory and exclusionary practices.”

The complaint lodged on Wednesday alleges that the airline refuses to supply its cheapest fares through global distribution systems, meaning that most travel agencies cannot access them unless they use the airline's channels.

Although ETTSA is also still very upset about the much-publicized $18 (€16) surcharge on tickets booked through the tech middlemen, it said that this new complaint was different and “limited to certain markets and routes.”

“If regulators do not intervene, Lufthansa’s practices will lead to reduced competition, a smaller number of airlines, fewer offers to consumers and ultimately higher prices,” said secretary general of ETTSA, Emmanuel Mounier.

“We had been hoping — for some time now — that the Commission would address these practices via its sector inquiry into the air ticket distribution market. But with the situation deteriorating fast for consumers as a result of Lufthansa’s practices, we have decided to take action and file a complaint to the Commission.”

ETTSA alleges that Lufthansa is using its dominant position in certain markets to take its cheapest fares out of indirect distribution channels and therefore force companies to go direct.

ETTSA also said that over the past 18 months, Lufthansa had "imposed multiple additional and opaque surcharges on bookings made on indirect distribution channels," meaning global distribution systems and travel agencies, particularly on flights to and from its main hubs.

Of the eight ETTSA board members, three represent Travelport, Amadeus and Sabre. Travelport chief of staff Simon Gros is chairman of the ETTSA board.

In a statement Lufthansa said: “The Lufthansa Group does not comment on any ongoing legal cases. Indeed, we have officially been informed today (Wed 19 Dec 2018) about the complaint from ETTSA (The European Technology and Travel Services Association) filed to the European Commission. Of course, the Lufthansa Group will cooperate with the investigating authorities.”

ETTSA said it had been speaking to the Commission's Directorate-General for Mobility and Transport for "some time" and is particularly concerned that other airline groups may follow Lufthansa's example.

There is no guarantee that the European Commission, which serves as the European Union’s executive arm, will open an investigation into Lufthansa’s behaviour.

ETTSA is bringing its claim together with German online travel association Verband Internet Reisevertrieb.

Wider War

Today’s skirmish is the latest development in a war that began back in September 2015, when Lufthansa first brought in the surcharge. Other airlines followed Lufthansa’s move and brought in their own fees.

ETTSA’s previous complaints against Lufthansa, which concerned the surcharge and whether it breached the EU's Code of Conduct on computerised reservation systems, failed to gain traction and in May 2018 the Commission dismissed the claim. In July, ETTSA took the matter to the European Ombudesmen.

In a totally separate action, Lufthansa and Sabre are involved in a legal dispute over the surcharge. The Supreme Court of Texas is presiding over the disagreement, as this is where Sabre is based.

The Texas case and any potential EU action show there is still plenty of appetite for pursuing Lufthansa. And remember Lufthansa isn’t the only airline with a third-party surcharge, Air France-KLM Group and British Airways parent company International Airlines Group have levied their own fees.

These distribution disagreements are going to rumble on into 2019 and probably beyond.