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Airline chiefs hailed Lufthansa’s move to levy a €16 fee on GDS bookings from September 1 when they met at the Iata airline association annual general meeting in Miami this week.
The carrier’s chief executive, Carsten Spohr, justified the move, saying: “We are using 30-year-old technology on these [GDS] sales channels and the customer is not happy with what they get. We don’t have enough of the profit in the value chain. Others in the industry have more.”
Other bosses at the AGM shared his view. Malaysia Airlines chief executive Christoph Mueller called it “a fabulous move”. A poll of Iata members revealed that 96 out of 120 would consider following Lufthansa’s lead.
Mueller said: “The transparency this will provide will support the best distribution choice.” He added: “Customers will book online.”
Alaska Airlines chairman and chief executive Brad Tilden said GDS payments to agents “need to be addressed”. “The airlines pay the GDS per segment and the GDS takes a chunk and pays the agency,” he said. “What Lufthansa has done is a good way to address this.”
Tam Airlines chief executive Claudia Sender said Lufthansa’s move “will force everyone in the industry to add value”.
Etihad Airways chief executive James Hogan was more cautious. “It’s a brave step,” he said. “We need to see value with our providers.”
The stock value of Lufthansa’s main GDS partner Amadeus fell 10% following the announcement, with one analyst saying: “The fear is the move becomes replicated by other airlines.”
Asked whether Lufthansa’s imposition of a GDS fee was linked to Iata’s development of a New Distribution Capability (NDC) for agent sales,
Iata director-general Tony Tyler said: “A number of airlines are implementing NDC-related strategies and Lufthansa is one of them.”