Airlines have shown a deep interest in the new distribution price for the ticket prices of Lufthansa.
Airlines all over the globe are considering whether or not they should follow a recent move by the airline Lufthansa, to charge an extra 16 Euros (AED 66) on tickets that are booked through third-party methods or systems. This is in hopes of increasing the income earned on tickets.
Lufthansa stated last week that it was applying the surcharge for such circumstances on global distribution systems (GDS), a decision that has prompted fury from other providers, such as Sabre and Amadeus in addition to other travel agents.
This decision by Lufthansa means that it will cost less for customers to book for their tickets through its personalized website.
The chief executive mentioned that Air France-KLM is deliberating its options. However, no decision has been finalized as of yet.
According to the chief executive, Alexandre de Juniac, during a meeting of the International Air Transport Association, imposing this surcharge is a key matter for them, considering the fact that the mass bulk of their profit comes in from the GDS.
Lufthansa stated that around two-thirds of the flights are booked through GDS. De Juniaz refused to specify the exact percentage of ticket revenues, according to their systems.
He did, however, mention that Air France-KLM has a couple of years left on its contract with the airline Amadeus, indicating how implementing an extra charge like that of Lufthansa’s would be very difficult from a contractual, legal, and financial view.
On Tuesday, the airline president for Emirates, Tim Clark, stated that the carrier was looking to have their own personal distribution system that would allow the company more control over ticket fees and allow for customized offers in response to customer preferences and data.
On Tuesday, Sabre Corp, Amadeus, and Travelport’s shares dropped over 3%.
Other airline’s CEOs who attended the business meeting, such as Willie Walsh from IAG and Brad Tilden from Alaska Airline, approved Lufthansa’s judgment, but stayed silent on whether or not they would do the same.
James Hogan, CEO of Etihad, stated that they need to value what their providers value. He said that it was a courageous step from Lufthansa’s end.
Others believed that Lufthansa would have to look into the after results of their recent decision in order to guarantee it doesn’t affect other commercial bookings.
One analyst from Euromonitor, Nadedia Popoya, said that the airline needs to ensure their new course does not estrange a very lucrative and sought-after customer division, which is the business traveller. Business travelers are the ones who rely almost exclusively on GDS providers in order to book airline tickets.