December 19, 2018 / 12:27 PM / 3 months ago

Travel agents seek EU antitrust probe into Lufthansa pricing

BRUSSELS (Reuters) - A group whose members include Amadeus (AMA.MC) and Expedia (EXPE.O), stepped up their fight against German airline Lufthansa (LHAG.DE) on Wednesday, urging EU regulators to investigate booking fees it levies on travel agents.

FILE PHOTO: A Lufthansa Airbus A321-100 airplane takes off from the airport in Palma de Mallorca, Spain, July 29, 2018. REUTERS/Paul Hanna/File Photo

In its complaint to the European Commission’s antitrust watchdog, the European Technology and Travel Services Association (ETTSA) alleged that Lufthansa’s fees have cost consumers using independent distribution channels more than 1 billion euros ($1.1 billion) since 2015.

German online travel agent VIR is a joint complainant with ETTSA in the case. The association’s other members are Odigeo, Opodo, bookers, eDreams (EDRE.MC), Sabre (SABR.O), Travelport (TVPT.N) and hotels.com, among others.

“LH (is) leveraging its dominant position on air transport services markets in Austria and Germany to control and manipulate the present and future distribution channels for LH and ultimately other carriers’ tickets,” the association said in its complaint. It said this penalized EU consumers in the short term as well as in the long run.

The Commission confirmed receipt of the association’s complaint against Lufthansa, saying that it would assess it carefully.

Lufthansa said: “Indeed, we have officially been informed today about the complaint from ETTSA filed to the European Commission. Of course, the Lufthansa Group will cooperate with the investigating authorities.”

Expedia said it supported the complaint because it was concerned about the carrier’s conduct.

The association said Lufthansa does not make available its cheapest fares, such as basic tickets which do not include fees for checked-in luggage or a reserved seat, on certain flights to global distribution systems (GDS) providers.

“As the next cheapest tickets are regularly around 20 percent more expensive than those reserved to Lufthansa’s direct channels, this measure has the effect that when a customer searches on a price comparison site, LH.com always appears as the cheapest option,” the association said.

It also alleged that Lufthansa levies unjustified surcharges on rival travel agents and forces them to use its own technological distribution systems instead of competing systems.

The complaint focuses on Lufthansa’s flights to and from its hubs in Frankfurt, Munich, Vienna and Zurich, and its subsidiaries Brussels Airlines, Swiss International Air Lines and Austrian Airlines.

ETTSA’s grievances against Europe’s largest airline date back to 2015, when Lufthansa started charging a fee for tickets booked through third parties in a bid to boost profits and have more say over its prices.

Lufthansa sells around 70 percent of its tickets via third party channels using GDS from Amadeus, Travelport, Sabre and other providers.

Amadeus and Sabre are themselves being investigated by the EU over contract terms that the antitrust watchdog says could prevent airlines and travel agents from switching to rival ticket agents.

ETTSA had previously complained about Lufthansa’s surcharges to the Commission’s transport department, saying that these breached the EU’s code of conduct on computerized reservation systems. The department has sent a pre-rejection letter, with a final decision on whether to dismiss the complaint due early next year.

Reporting by Foo Yun Chee; editing by Jane Merriman and Elaine Hardcastle

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