The Lufthansa Group airlines’ Distribution Cost Charge
On 1 September 2015 the Lufthansa Group airlines (Austrian Airlines, Brussels Airlines, Lufthansa and SWISS) introduced a worldwide charge for bookings made via global distribution systems (GDSs): the Distribution Cost Charge (DCC). Direct bookings via the Lufthansa Group’s websites continue to remain exempt from the DCC.
You will find all the essential details and background information on these changes in the following sections:
1. The need for adjustment in the context of the use of distribution channels
As a result of increasing digitalisation, you make use of a range of options to find out about the services of the Lufthansa Group and to book flights and additional services. The options which are currently the most widely used include, for example, the customer’s booking in the travel agency via global distribution systems (GDSs), via the Lufthansa Group’s websites and via online search engines. Depending on technology and service, these different booking channels give rise to different levels of significant costs which were previously largely borne by the Lufthansa Group airlines. These costs were passed on to all passengers at a flat rate as part of the ticket price.
With the introduction of the DCC, the Lufthansa Group airlines are no longer passing on these costs at a flat rate, but in a way that reflects the actual cause of the costs. This is because the costs of using a GDS, in particular, are many times higher than the costs of direct booking via Lufthansa Group airlines.
As you know, using a GDS offers travel agency customers many benefits over and above the simple booking of Lufthansa tickets. These include, for example, performance comparisons of different airlines or the technical connection of travel agencies as a basis for further services. A three-figure million euro sum is incurred for these additional services annually by the Lufthansa Group airlines.
In addition, there have been significant fee increases as the contracts with the most important global distribution systems for the Lufthansa Group airlines have been renegotiated.
In consequence of these altered parameters, the Lufthansa Group airlines have introduced a worldwide charge for bookings made via global distribution systems: the Distribution Cost Charge (DCC). Direct bookings with Lufthansa Group airlines continue to be exempt from the DCC.
As is already the case with the introduction of the new Economy Class Europe fares, by introducing the DCC the Lufthansa Group airlines are also enabling your customers to only pay for those services which they actually use. The Lufthansa Group airlines are thus taking a further step along the road of strategic realignment, with personalised and modular offers.
2. Worldwide Distribution Cost Charge (DCC)
A uniform worldwide* charge of 16 euros for all global distribution systems will be levied on all tickets of the Lufthansa Group airlines (Austrian Airlines, Brussels Airlines, Lufthansa and SWISS) issued from 1 September 2015 via a GDS. This Distribution Cost Charge will be automatically calculated in the GDS and taken account of when issuing a ticket.
The amount of the DCC is based on the additional costs incurred by the Lufthansa Group through GDS bookings in comparison to direct sales.
3. Booking channels that remain DCC-exempt
The DCC is not incurred when you book directly with the Lufthansa Group airlines. Thus, the following booking channels continue to remain exempt from the DCC:
* In some countries the introduction of the DCC requires official authorisation. As at February 2016, the following countries have been exempted from the DCC: Brazil, China, Hong Kong, Iran, Yemen, Libya, New Zealand and Tunisia.