The Lufthansa Group is increasing its
Distribution Cost Charge (DCC) this autumn in a move described as
“disappointing” by the Business Travel Association.
From 1 October, the DCC
surcharge will rise from £14/€16/US$17.50 to £17/€19/US$21 and applies to all
tickets issued via the GDS for bookings with Austrian Airlines, Lufthansa,
SWISS, Air Dolomiti and Brussels Airlines.
“The reason for this adjustment is the
increase in GDS costs since the introduction of the DCC in September 2015,” the
airline said in a communication to trade partners on 14 September.
The group said that a number of booking
channels remain DCC-exempt, including its Direct NDC API, lhgroup-agent.com and
the websites of its member airlines.
The DCC fee was first introduced in 2015 –
then costing £11.30 – as Lufthansa sought to reduce its GDS costs and steer
more bookings through its direct and NDC channels. The group increased the charge to £14 in June 2019.
“More and more sales partners are using a
direct access solution to the Lufthansa Group airlines,” it noted.
The Business Travel Association said: “We understand that every company has significant
commercial pressures at the moment, but a more collaborative approach with TMCs
would have greater success in re-igniting business traffic, rather than a short-notice
fee hike which restricts the breadth of inventory the industry needs by
penalising a key distribution channel.”
The BTA added that the move “is likely
to reduce the airline’s business travel revenues in the long term”.
A spokesperson for a global TMC said it
is “engaging with Lufthansa
Group and our GDS partners on developing balancing agreements that reflect the
needs of all parties, including our customers, in light of this.”
Meanwhile, Nicola Ping, manager, air content and distribution,
Flight Centre/FCM Travel Solutions, said the development was “disappointing and
at odds with the current situation”.
Ping added that FCM and Corporate Traveller
customers will not be affected by the fee increase due to its development of
its own NDC solution. “Depending on clients’ needs, we can access
content via GDS or via API through our preferred aggregator and the latter is
excluded from the surcharge and also includes all Lufthansa content,”
said Ping.
In a similar move to the
Lufthansa Group, Air France and KLM also increased their Distribution
Surcharge from €12 to €13 one-way on GDS sales as of 10 September.
“This surcharge covers
the cost difference between the GDS distribution and the corresponding costs of
AF and KL direct sales. During the implementation of the Distribution Surcharge
in April 2018, AFKL indicated that the level of the distribution surcharge
would be regularly reassessed and could change in the future,” said the
airlines in a message to trade partners that was passed to BTN Europe.
“The revaluation is necessary because the cost difference has increased since
the distribution surcharge was introduced.”
The surcharge does not apply to its direct
channels or NDC connections.