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GBTA Responds To Lufthansa Group Airlines’ Planned GDS Fees


Posted by Kevin Iwamoto on 06/11/2015

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In my last blog post, I talked about watching the industry’s reaction to the Lufthansa Group airlines announcement — which revealed the company’s decision to add a surcharge to tickets purchased anywhere other than its websites, service centers and airport ticket counters — beginning on September 1, 2015.

Today, the Global Business Travel Association (GBTA) — issued the following statement in response:
“We believe that this planned strategy will negatively impact corporate travel programs both directly and indirectly in the following manner:
 
  • It is a direct price increase to managed travel programs with no corresponding benefit.
  • It will cause fragmentation of existing distribution processes, which is unnecessarily disruptive, resulting in significant increased costs to the corporation.
  • It will further result in decreased price transparency if carried out by not only Lufthansa, but other airlines in the industry.”

The press release went on to say that while “GBTA recognizes that change in the marketplace, even disruption, can lead to positive outcomes for the business traveler and the corporation, but that in this case the cost of disruption far outweighs the benefit.

“This position was carefully considered by our committees and leadership after discussions with Lufthansa representatives and our industry partners.

“As the voice of the business travel industry and the corporate travel buyer, GBTA strongly opposes the Lufthansa Group’s plan and calls on Lufthansa to reconsider their September deadline.  We propose Lufthansa enters into continued discussions to find a constructive path forward with the buyer professionals and their corporations who ultimately bear the entire cost of global travel.”

The above commentary by GBTA clearly echoes what I wrote about in my blog post. There have also been other notable objections to this from other trade groups and associations.  

The key test will be how long Lufthansa Group Airlines can hold hard-and-fast to this strategy. If they have a successful period of results for the first 30/60/90 days, the likelihood of this strategy sticking around becomes greater.  

Only time, profits and industry pressures will tell whether this becomes the latest bold disruption in the marketplace that changes the landscape for everyone. There’s so much at stake, all of us need to keep on top of this story, and track it to determine what your own course of actions will be for your program.

 
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