Introduction of a Distribution Cost Charge (DCC)
Distribution changes concerning Lufthansa Group airlines Austrian
Airlines, Brussels Airlines, Lufthansa and SWISS
02.06.2015
There are many ways customers can find out about airlines’ flights,
services and booking options
1
Airport counters
LH.com
Call centres
Online travel agents
‘Traditional’ travel agents
Tour operators
Metasearch engines
Travel management companies
Depending on which technology is used and which services are on offer,
different ways of booking lead to variations in distribution costs
As the contracts for Lufthansa Group airlines’ most important Global Distribution Systems
(GDS) have been renegotiated this method of distribution has incurred considerable
additional increases in costs
2015
Third-party sales
GDS costs
‘Traditional’
travel agents
Online
travel
agents
Consolidators
Travel
management
companies
GDS
2
Direct Sales
sales
GDS
GDSequivalent
equivalentcosts
cost
Tour
operators
Metasearch
engines
Internet
Dotcom
direct sales
Call
Call centres
Center
Direct Connect
Airport sales
Airport Desk
counters
Booking via a GDS offers advantages to customers who want more than
a simple booking and issuing of tickets for LHG flights
 Processing of complex travel bookings
Customer
 Comparison of services and prices from various airlines
Advantages
of using GDS
 Integrated booking and billing processes
 Technical linking as the basis of additional services
 Monitoring and documentation of carbon-dioxide emissions
3
In order to allocate distribution costs fairly according to source,
Lufthansa Group airlines are introducing a Distribution Cost Charge
(DCC)
Costs generalized
Costs allocated fairly
until now
according to source in future
Sales via GDS
€
GDS costs for
extra services
Integrated ticket price
 Until now these costs were borne mainly by Lufthansa
Group airlines
 To calculate prices the distribution costs were
generalized, regardless of the source of the sale, and
passed on to the customer as part of the ticket price
4
Sales via GDS
Direct sales
€
Direct sales
GDS costs for
extra services
Ticket price + DCC
Ticket price
 Customers who require more than a simple booking
and issuing of tickets for Lufthansa Group flights will
bear the extra distribution costs
 Customers who book directly via Lufthansa Groups
airlines‘ distribution channels will not pay any DCC
The Distribution Cost Charge (DCC) will be levied on all indirect
distribution channels* from 1 September 2015
Distribution
channels affected
Indirect distribution channels (GDS)*
Participating
airlines
*
**
5
Countries
Worldwide**
All LH Group
airlines tickets from
1 September 2015
DCC levy per ticket
CHF 16.Worldwide uniform levy for all GDS
Excluding group tickets for LH and OS; in the case of LX und SN group tickets the DCC will apply.
In some countries the introduction of the DCC will require official approval. At the time of writing, this approval is not yet available for the following countries: China, New Zealand.
Communication of the introduction of the DCC will therefore take place subject to the agreement of the appropriate government agency in each case. The current exceptions are:
Hong Kong, Iran and Lybia
.
The DCC is based on the extra costs the LH Group incurs through GDS
bookings by comparison with bookings made directly with LH Group
How the Distribution Cost Charge is calculated
DCC
CHF 16.per ticket
The DCC shown in this calculation does not completely cover the GDS costs incurred by Lufthansa Group airlines. Third-party sales
for Lufthansa Group airlines still contain at least part of the costs corresponding to the costs of direct sales. This calculation was
validated by a specially commissioned independent auditor.
6
Calculating and billing the DCC takes place automatically and does not
entail any process changes for customers or travel agencies
Ticket purchase
Workload
Billing
 No process change
 No process change
 No process change
 The DCC is calculated
 The DCC is automatically
 The DCC is automatically
automatically within the
reservation systems (GDS).
 The DCC is completely integrated
into the ticket purchase thus
incurring no process changes for
travel agencies. Travel agencies
can focus fully on advising and
serving their customers.
 The DCC is set up in the systems
as an OB-Fee thus guaranteeing
consistency across systems.
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identified as part of the total price
(‘grand total’) and paid together
with each respective payment
method.
 This completely automated
workload protects travel agents
against ADMs.
included in the billing of the total
price.
 Complete transparency, as the
DCC is marked separately on the
passenger/itinerary receipt.
Customers who book directly via the Lufthansa Group airlines sales
channels will not incur any Distribution Cost Charge
LH Group
airlines’
Internet
platforms
AgentManager.at*
Travel agents’
booking
platforms
Airport ticket
desks and call
centres
* Only available in Austria
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Enhancement and development of the free-of-charge distribution
platforms LH.com and LHGroup-agent.com
LH.com
LHGroup-agent.com
 When the DCC is implemented corporate
customers worldwide will be able to make
bookings via www.LH.com at their individually
negotiated corporate rates without DCC.
 The existing Lufthansa-agent.com booking
platform will be enhanced and re-launched as the
Lufthansa Group booking portal for participating
travel agents.
 There will be two ways to access corporate rates
at LH.com:
 LHGroup-agent.com provides travel agents with
access to current flights, prices, general
information and online ticketing.
 via access code at LH.com
 via individual corporate intranet
 In addition the address and VAT number of the
company will be quoted automatically on the
passenger receipt.
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 Available globally in 90 countries/12 languages for
bookings with Lufthansa Group airlines.
 Can also be used by travel agents to book
corporate rates for their customers.