Last updated: 02:00 PM ET, Fri August 14 2015

Business Travel Coalition Takes On Lufthansa

Airlines & Airports | Rich Thomaselli | August 14, 2015

Business Travel Coalition Takes On Lufthansa

The Business Travel Coalition this week said it has submitted a letter to Lufthansa Group in which it “forcefully rejects” the airline’s plans to implement a surcharge on any tickets not purchased via Lufthansa’s website or ticket offices.

The letter included 10 pages of industry comments and was sent to Lufthansa Group chairman and CEO Carsten Spohr, the LHG Supervisory Board and antitrust officials in Brussels, Bonn and Washington. It was signed by a group of 135 diverse travel buyers, consumer groups, industry associations, travel agencies and other stakeholders, with operations in some 155 countries.

Lufthansa announced earlier this year that beginning on Sept. 1, it would begin charging customers 16 euros per ticket if the fare was purchased through a third party such as a travel agent or online travel agency. The surcharge would not be applied if tickets were bought through Lufthansa websites, service centers and airport ticket counters.

The move was generally met with support and enthusiasm by other airlines, leading many industry observers to believe that other airlines will soon follow suit.

“Today some airlines are waging a war on new entrant airline and inter and intra distribution channel competition. For example, in an unvarnished attempt at commercial protectionism, some U.S. and EU airlines have successfully strong-armed regulators to block Norwegian Air International’s proposal to serve U.S. markets from the EU and have called for a freeze on Gulf carrier service to both the U.S. and EU,” BTC president and AirChannelChoice founder Kevin Mitchell said in a statement. “Now that these carriers have secured their antitrust immunized global alliances, and dominant market positions, they are relentless in their pursuit to protect those positions through efforts to obscure fares and fees, undermine consumer protections and block competition. The LHG’s surcharge is just the latest egregious example of this anti-consumer behavior.”

The BTC is asking travel professionals in each country to formally request that their respective antitrust authorities look into the matter.

At risk is the transparency of airline fares, BTC said, noting that the 16 euro surcharge might be enough of a deterrent for a potential customer to completely avoid an online travel agency to compare fares, yet ending up paying more by going directly to the airline.

 “In the marketplace for airline distribution services, airlines (direct channel) and travel agencies of all stripes (indirect channel) are direct competitors,” Mitchell said. “By forcing the 16 Euros surcharge on indirect channel participants, is LHG using its dominant market position in both the marketplaces for commercial air services and airline distribution services to drive up the costs of its travel agency competitors harming them and forcing many to exit the market? Antitrust enforcers need to examine this question.”


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