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GDS Fees: Lufthansa stands firm, despite pressure from agencies

Lufthansa will not back down on the establishment of GDS fees


The France Director of Lufthansa came to the SNAV conference to defend the establishment of the 16 euros GDS fees. A position that the German company is alone in supporting, toward and against us.



Steffen Weinstok, France’s Director of Lufthansa came to defend the GDS fees of his company in front of tourism professionals. DR-JDL
Steffen Weinstok, France’s Director of Lufthansa came to defend the GDS fees of his company in front of tourism professionals. DR-JDL
Steffen Weinstok, France’s Director of the company Lufthansa has lots of panache.

On Tuesday November 17, 2015, he did not hesitate to come defend the company’s position during the Day of Travel Entrepreneurs (JEVO) .

While the entire profession is up in arms against the establishment of 16 euros GDS fees, last September, the man took the stage to justify the company’s choice and to repeat that he wasn’t at war with travel agencies.

“Of course, there is still room for travel agencies. But our competitors are developing rapidly outside GDS. We need to adapt.”

Without directly shaming GDS, Steffen Weinstok believes that these systems produce lots of added value to clients, but were not very useful to companies, that still have to pay for their service.

“We will not back down on these fees. We are currently in contact with technological service providers to find new efficient distribution solutions.”

Some agencies are very angry at Lufthansa

Georges Rudas, CEO of Amadeus, was surprised by the criticism directed at his company that has been working marvelously for 27 years.

“We work in enabling agencies to access content in one way or another. The GDS respect a code of good conduct by not showing, first, who pays the most, as Google does.”

Yet, Pascal Perri, economist, understands that airline companies are looking for ways to save even the smallest amount.

But he objects to direct confrontation, and advises to collaborate instead.

“Intermediaries are healthy for the market when they produce added value. Consumers need that. It would be better to cooperate with GDS to help them evolve and better present innovation.”

As for business travel, opinions differ. According to a study led by AFTM, only 18% of the 182 agencies who answered were given sanctions.

24% tried to negotiate with the company and 6% obtained arrangements.

However, Jean-Pierre Lorente, from Selectour Afat Bleu Voyages, is very angry.

He abruptly stopped all of the communication actions and commercial operations with Lufthansa, that accounts 6 to 7% of his activity.

“I am not bothered by the 16 euros, it is more about principle. This extra fee was decided on unilaterally without consulting with us,” he expresses.

He assures that the corporate website established by Lufthansa to stimulate direct sales is not adapted at all and incurs a productivity loss for its sellers.

A criticism also echoed by Jean Korcia, President of Manor, where the sales of Lufthansa would be experiencing a drop of 35%.

The president promises that if no compromises are made then he will not renew his arrangements with the company.

The future competitors of GDS are still nascent

However, Bertrand Mabille, the Vice-President of Carlson Wagonlit Travel is more moderate. He believes that the 16 euros fees are absorbed with no pain on long-haul flights.

“As long as there is only one company, it is still manageable, but the day that all other companies follow this path, then we will need to build a new system and no one can say if it will be better or less expensive than what already exists today.”

On his end, Pierre Descazeaux, CEO of the France Air France market, guaranteed, under the loud applause of the room, that his company will not follow the path of its German competitor.

Without, however, prohibiting from looking attentively at the new entrants and the value that they could add to the distribution channel.

Because the sale of plane tickets, despite its complexity, whets appetites. We’re thinking of the company MisterFly, that was recently launched on the French market, and that allied with the website VentePrivées.com

We can also mention Google Flights, even though the motor of this American giant is still at the nascent stage in France.

It is starting to slowly but surely break through the market with the signing of a "connect direct" agreement with Lufthansa.

While it is little probable that it will catch up to the technological advancements made by GDS, it could benefit from the establishment of a new NDC norm.

Indeed, this should enable it to connect more easily to the stocks of airline companies without having to make large financial and technological efforts.

Written by Laury-Anne CHOLEZ translated by Joséphine Foucher the 19/11/2015
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Tags : lufthansa

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