A User’s Guide to Lufthansa’s GDS Fee

A Lufthansa Group executive provided further details on the group’s planned implementation of a Distribution Cost Charge (DCC) on Sept. 1.

The charge will be applied to every booking on an LHG airline—Lufthansa, Austrian, Brussels, and Swiss airlines—processed by a GDS in most countries in the world.

In a webinar jointly presented with the Association of Corporate Travel Executives, Lawrence Ryan, director of marketing, sales programs and distribution for the Americas, addressed several issues raised by the corporate travel community:

DCC levels: The DCC, currently set at €16 in the Eurozone, has been set at non-fluctuating levels in most major markets. It has been set at $17.50 in the U.S. and $23 in Canada.

The fee will also remain at a set level for British pounds (£11.30), Swiss francs (Fr. 16) and Japanese yen (¥2180).

In countries using other currencies, the fee will be converted at the time of ticket issuance.

Fare transparency: Requests in GDSs for fare quotes that include all taxes and fees will automatically include the DCC. A display in any corporate booking tool whose ticketing is enabled by a GDS also will include the fee.

Implementation: As previously reported, Lufthansa initially intended to display the DCC in an OB field on the ticket. But that ran into a technical snag with one of its technology providers, Ryan said.

Rather than having different procedures in different systems, Lufthansa elected to implement the fee using a YR-IATA tax code until the technology provider resolves the issue.

When the OB field is implemented, the total fare will still be displayed, Ryan said.

The surcharge will not apply to travel originating in China, Hong Kong, Iran, Libya, New Zealand, and Yemen, where its legality is questioned. If travel is booked in one of those countries but originates elsewhere, the DCC will be applied.

In Brazil, where the YR code can be used only for government-imposed fees, implementation of the DCC will be delayed until the OB plan is in effect.

Code-shares: The DCC will not be applied when a Lufthansa-operated flight is sold and ticketed as a United or Air Canada code-share, but Ryan cautioned that agents cannot simply book a code-share for every transatlantic Lufthansa flight.

At least one leg of a code-share itinerary must be operated by the plating carrier, he said.

In addition, certain services offered by an operating carrier, such as premium economy, pet carriage and special meals, may not be appear in the display of the marketing carrier.

Refunds and exchanges: The DCC is nonrefundable even if the fare is refundable, Ryan said. If the agent is using an automated refund tool, manual intervention may be required to prevent the refunding of the fee.

If the ticket is voided before the transaction is reported to ARC, it will not incur the fee.

The fee will not be reassessed if the ticket is changed, regardless of the nature of the new itinerary, Ryan said.

Lufthansa currently has no direct connections with any corporate booking tools, but “constructive dialogues” are ongoing, Ryan said.