ATW Daily News

Amadeus to resume partial compensation for Lufthansa's Preferred Fares surcharge

Wednesday October 21, 2009

News from Travel Technology Update: Amadeus told its German subscribers it will begin partially compensating them for payments they make to Lufthansa under the carrier's Preferred Fares program on Jan. 1.

Lufthansa's PFP, which went into effect in July 2008, imposes a €4.90 per-segment surcharge for Germany-originating flights booked through Amadeus.

Lufthansa reached agreements for lower distribution costs with Sabre and Travelport that exempt their subscribers from the surcharge, but Amadeus, the largest GDS player in the German market, did not.

Amadeus said it will pay €3.40 per segment, leaving German agents to shoulder €1.50 of the per-segment surcharge.

Amadeus had paid the full surcharge until Jan. 31 of this year. Since it ceased compensating agents, its market share in Germany has dropped from "well over" 80% to around 70%.

Holger Taubmann, Amadeus' manager for Germany, told German agents that his company is in "intensive discussions" with Lufthansa and "there is movement" on the issue.

Lufthansa's PFP imposes hefty fare hikes for flights departing Germany, but consumers can avoid the increases by booking directly with the carrier. Agents could continue booking the lower fares by paying the surcharge.

The PFP has created considerable distress in the German corporate travel market.

Amadeus has said that Lufthansa's surcharge is higher than the GDS segment fees that the carrier pays.

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