Will Other Airlines Follow Lufthansa On Ticketing?
You know how business works, especially in the airline industry. Take airfare sales, for instance. Nobody wants to do it, but once the first domino falls, well, forget it. Everybody’s on board.
Now everybody in the industry is wondering when the next domino will fall after Lufthansa announced last week that beginning on Sept. 1, 2015, it will add a 16 euro surcharge ($17.80 US) to any ticket that isn’t booked through its websites, service centers and airport ticket counters.
“We believe the market is ready for this change,” Lufthansa chief commercial officer Jen Bischof said during a media conference call Tuesday. “Somebody’s got to do it.”
It’s another way for airlines to stem the flow of revenue they say is being lost going through the global distribution systems and online travel agencies.
At the International Air Transport Association (IATA) annual general meeting in Miami on Monday and Tuesday, Reuters News Service talked to several airlines about whether they would mimic Lufthansa’s move.
And some are most definitely considering it.
"It's a key issue, an absolutely key issue for us,” Air France-KLM chief executive officer Alexandre de Juniac told Reuters. “The majority of our revenues comes from GDS.”
Emirates Airline president Tim Clark said the Persian Gulf carrier is in the midst of creating its own distribution system.
Lufthansa is complaining that it is paying an inordinate amount of fees to GDS such as Sabre, Travelport and Amadeus.
“Until now, the percentage of revenue generated from the sale of flight tickets by our airlines has continuously decreased,” Bischof said. “While other service and system partners in the value chain are recording increasing margins and returns, our airline’s earnings have been compromised over time, even though they are the actual providers of flight services. We want to counteract this trend by refocusing our commercial strategy.”
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