Major TMCs pass on Lufthansa surcharge

Clients faced with news bills

Major German and Austrian travel management companies (TMCs) are passing the surcharge for booking flights on Lufthansa and SWISS onto their clients.

The fee is payable under the airlines' controversial preferred fares scheme for bookings made through GDSs.

But up until the end of last month, it was being absorbed by Amadeus, the dominant GDS in the two countries.

HRG clients will be faced with a charge of €6.80 which includes the €4.90 booking fee and a "small" administrative handling charge of €1.90.

Amadeus said its ending of absorbing this fee has led to some agents in Germany and Austria switching to other GDSs.

Agents using rival GDSs Sabre, Worldspan and Galileo are exempt from the fee as their GDSs have signed deals with Lufthansa and SWISS.

Despite prolonged talks, Lufthansa and Amadeus have not reached any agreement although a spokesman for the GDS said the talks were still continuing.

The fee is also now payable on flights on Austrian Airlines which joined the Lufthansa Group earlier this year.

Dr Mathias Warns, managing director of HRG Germany, said most clients had accepted their decision to pass on the surcharge and handling fee.

But he said his TMC was in discussions with its biggest clients to see whether a monthly fee could be arranged to reduce complexity and costs.

While he said "anger" was the wrong word to use to describe feelings towards Lufthansa, Dr Warns said that some major clients were considering using alternative fares and alternative carriers.

He said he the bigger clients have had "serious discussions of doing corporate deals with alternative carriers on certain destinations."

He said the preferred fares scheme had been introduced by Lufthansa to try and break Amadeus' monopoly in Germany and Austria.

Lufthansa is one of the founder airlines of the GDS and still has a stake of 11.5% in it.

"We have had a lot of discussions on this. They (Lufthansa Group) do not say this in their press releases but they will talk quite openly to you about it. The idea was to instil some competition among the GDSs by offering more corporate deals.

"The aim is understandable but Amadeus is a creation of Lufthansa. It is like shooting yourself in the foot.

"But the monopoly that Amadeus has makes it difficult for the others to catch up. Amadeus still offers considerable benefits to corporates in the German market.

"TMCs can't switch overnight. It would require a lot of re-training of staff who have been using Amadeus all their working life.

"I think maybe the problem was not fully considered as I think Lufthansa are not going about it in the right way."

Lufthansa/SWISS announced the preferred scheme last January and began levying the new charges on July 1 in Germany and Austria and from October 1 in Switzerland.

Fares went up by €15 one way or €30 return on all tickets bought in the three countries.

But the carriers have continued to make available the previous lower fares.

They are called "preferred fares" and are the subject to a surcharge if booked through a GDS.

Lufthansa charges agencies €4.90 plus VAT per coupon and SWISS charges CHF8 (€5) per booking.

It is this surcharge that Amadeus was absorbing since July and which HRG and other TMCs are passing onto their clients.

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