ACCORDING TO AMON AMON COHEN
managers love to hate. The latest of several unpopular
CHARGED UP G
ood old Lufthansa. It’s almost as if it relishes being the airline travel
changes it has imposed is a Ð16 Distribution Cost Charge (DCC) on bookings made through global distribution systems (GDSs), due to take effect from September 1. Buyers, travel management companies (TMCs) and GDSs have all registered their outrage, but I have mixed views. I think Lufthansa’s rationale is reasonable, and perhaps even a good thing, in principle, but the way it has gone about it is wrong. Where I feel Lufthansa does have a point is charging more for bookings through a distribution channel that benefits corporate customers and their service providers much more than it does the airline. Why should Lufthansa have to provide a free GDS route just because that’s the way things have always been done – seemingly the nub of some critics’ arguments? After all, Easyjet charges for bookings made through GDSs. And with all sorts of new distribution methods coming into the marketplace, it’s time to examine different solutions. Where Lufthansa has gone
wrong is that it didn’t ask clients what those solutions might be. The immediate alternatives it is offering
38 BBT SEPTEMBER/OCTOBER 2015
HAVING TO PAY MORE FOR BOOKINGS VIA A GDS IS PUTTING THE INDUSTRY IN A SPIN
(booking directly through the airline’s website or a special agency portal) are, by universal agreement, unworkable. They are difficult to integrate into management processes, most notably gathering data for traveller tracking.
Airlines like Easyjet and Air Canada have found new ways to connect using application programming interfaces (APIs). Lufthansa has said it is working on an alternative using IATA’s New Distribution Capability (NDC) standards. It really should have waited to get that technology in place. The other problem is the size of the new charge. Lufthansa says an independent consultant assessed this figure as its cost of selling a ticket through a GDS minus the cost of selling directly online, but I have yet to see anyone else recognise this figure. Consensus seems to be that a GDS transaction fee is roughly one-third that amount. Once again, compare with Easyjet, which charges a £3.30 per segment GDS booking fee. A fee of Ð16 stokes accusations that Lufthansa wants to profit from accepting bookings through the GDS channel, or force direct bookings that leave travellers unable to compare its fares with other airlines. There is a legitimate case for overhauling our dysfunctional distribution model – but this isn’t how to do it. Lufthansa should come back when it has a properly thought-out Plan B.
There is a legitimate case for overhauling the distribution model – but not this way
IT’S LIKE SHOOTING FISH IN A BARREL. Every time my esteemed colleagues on national newspapers want a front-page splash, all they have to do is whack in a Freedom of Information request to inspect the expense claims of yet another senior public figure, then whip up a froth of self-righteous indignation. Among the latest to get worked over in this way is the Commons’ Speaker, John Bercow. One item considered worthy of finger-wagging was £13,000 to take him and an assistant to Australia for a week – which sounds reasonable for such a trip. There was also £126.72 for a car to take
him less than a mile from the Commons to a state banquet, wait for him, then come back. But can eminent officials really be expected to walk in best bib and tucker on a miserable March night, or even hail taxis? And I wonder if the speaker was even aware of the cost of cars booked on his behalf. A little naughtier was the House of Lords deputy speaker caught pants down by The Sun during an alleged cocaine- and-hookers binge. Lord Sewel did himself no favours, but travel managers have reason to be thankful: if ever they need a killer argument for scrapping per diem expenses in their organisation, they can quote his lordship’s immortal remark on his £200 daily Lords’ attendance allowance to one of the ladies servicing him: “It’s not lunch, luvvie darling, it’s paying for this.”
Amon Cohen is a specialist business travel writer, conference moderator and media trainer.
BUYINGBUSINESSTRAVEL.COM
Illustration: Ben Southan
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