The Managing Committee of Travel Agents Federation of India (TAFI), in consultation with its chapters, members, and key stakeholders all over India, are unanimously of the view that the announcement by the Lufthansa Group (Lufthansa Airlines, Austrian Airlines, Brussels Airlines, and Swiss International Air Lines) of implementing Distribution Cost Charge (DCC) is detrimental to the industry, hurting both the agents and the customers.
TAFI, in a statement, has said that in a move to redirect their commercial strategy and safeguard the percentage of revenue generated from the sale of flight tickets, the Lufthansa Group has decided to add a fee of EUR 16 to every GDS booking starting September 1, 2015. “The DCC, however, will not be applicable if tickets are purchased from their own website, service centres or ticket counters at airports,” the statement notes.
“Our members ticketing any of the four Lufthansa Group carriers through the GDS will be affected. This is sheer discrimination by Lufthansa, which is only going to add to the fare with no benefits accruing to the travel agents or customers. Such a move will drive leisure and business travellers seeking to avoid the 16 Euros surcharge to the walled gardens of LHG’s websites where comparison-shopping does not exist and where LHG would generate higher yields—especially from unsuspecting, infrequent travellers. For managed-travel programmes, the surcharge represents an indirect price increase. It also wants to use its dominant market position to price Online Travel Agencies (OTAs) out of the market and out of business, as many OTA customers would be unwilling to pay 16 Euros when LH.com is free,” TAFI says.
The Association is of the opinion that implementation of the DCC will be another hidden cost passed on to the consumer, and an attempt to make fare transparency and comparison more difficult. There is indeed no comparison possible, when the consumer goes on the LH website, TAFI says in the statement.
“If the DCC is implemented where the cost is passed on to the agent, or the agent is forced to use an alternate booking platform, could possibly result in our members reducing/off selling the airline, which would have a negative impact on the airline, which presently has a strong support from the agent community,” the statement reads.
Zakkir Ahmed, President, TAFI, stated, “This is indeed a grave issue that needs to be addressed. TAFI is open to a dialogue with the Lufthansa Group to arrive at a win-win situation for all stakeholders – the airlines, travel agents, and customers.”