7 HRS AGO
Online travel agencies claim Lufthansa GDS charge is manifestly illegal
It hasn’t been a greatest seven days for Lufthansa with its plans to introduce a Euro 16 levy on all bookings made via intermediaries.
First of all, a tax loophole in Brazil meant that travel agencies in the country are going to be exempt from paying the fee when it is introduced on 1 September.
Then it emerged that Brazilian agencies will be joined by those in China, Hong Kong, Iran, Yemen, Libya and New Zealand with a similar postponement.
Now, in a strongly statement, a group of leading online travel agencies in Europe have called on Lufthansa to scrap the proposal immediately.
The OTAs signing the plea include two of the big guns in Europe, Lastminute.com Group and eDreams Odigeo, alongside Travelgenio, Travelplanet24, Travix (run by BCD Travel), Unister Travel, e-Travel and Etraveli.
Although none of the companies on their own punch enough weight to deter Lufthansa, perhaps with the slight exception of Lastminute.com and eDreams Odigeo, as a group they estimate some four million Lufthansa tickets are sold on an annual basis.
There is no suggestion of a boycott in the statement issued by Simmons & Simmons, a UK-based law firm.
Instead, they claim the GDS tax will “have a significant negative impact on consumers and the industry as a whole”.
This, they argue, will come about through limiting choice, increased prices to consumers, a reduction in fare transparency and a restriction on agencies “in their ability to serve their customers”.
In short, the eight argue the Lufthansa surcharge is “manifestly illegal” and a “direct attack on the OTA business model”.
The statement continues:
The surcharge breaches the non-discrimination rules that apply to a parent carrier under the CRS Code of Conduct and also constitutes an infringement of EU competition law and equivalent provisions under national competition laws.“Apart from the abusive nature of the practice, there are indications of a price fixing conspiracy among the airlines to impose a surcharge on OTAs. The surcharge also amounts to a breach of national commercial agency laws and unfair trade practices laws. “
If the surcharge impacts on the ability of the eight OTAs to sell Lufthansa tickets (if consumers instead go directly to the airline’s website), between them they could essentially lose out on almost a sixth of their total air ticket volume on an annual basis.
