Lufthansa Changes Collection Plan For Controversial GDS Surcharge

by Michele McDonald

The Lufthansa Group has run into a technical snag as it prepares to impose a €16 surcharge on all GDS bookings in most countries, beginning Sept. 1.

In order to collect the surcharge, it has to appear on the ticket. Lufthansa had planned to use the OB fee field, but it turns out that not all GDS companies are able to display it in all markets.

The Lufthansa Group instead plans to implement the fee, called a Distribution Cost Charge (DCC), by levying a YR-IATA tax code in all GDSs until they are fully capable of displaying the OB fee.

Lufthansa said the charge will be automatically levied as a YR-IATA tax code in all the systems.

The charge is nonrefundable and will be levied only once, regardless of whether a ticket is changed.

Delays in some countries
Shelly Younger, manager of settlement services at ARC, said that in most markets, the YR code can be used for items that are not taxes.

But she said some countries, such as Brazil and Russia, have rules governing airline tickets that could present some “challenges.”

Lufthansa’s implementation of the Distribution Cost Charge will be delayed in Brazil until the legality of the collection method is clarified or until the OB fee can be displayed.

Announced in June
The surcharge was announced in early June as Lufthansa’s full-content agreement with Amadeus expired. It will apply to all airlines in the group, including Lufthansa, Austrian Swiss and Brussels airlines.

The surcharge will not apply in China, Hong Kong, Iran, Libya, New Zealand and Yemen.

Travel agents and corporate travel managers have called the surcharge disruptive and most see it as nothing less than an out-and-out price increase.

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