In a letter to its travel advisor partners on Monday, Lufthansa announced that starting Oct. 1, 2020, it would be upping its GDS fee for its group of airlines by 30%, from $16 to $21.
“Austrian Airlines, Lufthansa, SWISS, Air Dolomiti, and Brussels Airlines are adjusting the Distribution Cost Charge (DCC). Starting October 1, 2020 (date of ticket issue), the DCC will increase from 16/USD to 21/USD for all Lufthansa Group airlines’ tickets issued via a GDS,” Lufthansa said in a message to its travel partners obtained by TMR.
The reason for the increase, Lufthansa said, is “the increase in GDS costs since the introduction of the DCC in September 2015.”
Lufthansa first rolled out its GDS charge in September 2015. At the time, it said that the DCC was part of its new commercial strategy to cut costs, but members of the travel agency community reacted negatively, saying that Lufthansa was passing the charge onto them, penalizing the agency community for rising GDS costs of which it had no say in.
The story was one of the most heavily debated issues from that year, with a lot of concern coming from agencies that the surcharge would set the standard in the industry and other carriers would follow. Lufthansa CCO at the time, Jens Bischof, said during a media conference call that “we believe the market is ready for this change” and that “somebody’s got to do it.”
No other major North American carrier has since replicated Lufthansa’s fee and Lufthansa was eventually the subject of an assessment from the European Commission, the executive arm of the European Union (EU), about complaints by agencies and CRS providers.
Lufthansa did not respond to TMR’s request for comment on today’s increase.