Expatica news

Lufthansa plans service charge

29 March 2004

FRANKFURT – German airline Lufthansa, scrambling to recover from record losses, aims to charge a service fee on sales of its tickets in a move which some analysts said could backfire and drive customers even more to the low-fare airlines, reports said Monday.

In the latest issue of the weekly magazine Focus, airline officials said Lufthansa, starting on 1 September aims to add a charge of EUR 30 per ticket on flights in Europe and EUR 45 on intercontinental flights.

The move would fall under Lufthansa’s announced aim of listing ticket rates as a “net” price starting on that date.

The service charge would apply to ticket sales online, at Lufthansa counters and at the airline’s telephone reservation centres. Those booking online would continue, as now is the case, to get a EUR 10 rebate.

At the same time, Lufthansa aims to stop paying a commission to travel bureaux, leaving it up to them whether or not to pass the cost on to the customers. The savings on commissions would help the airline cut its costs by EUR 100 million per year.

Lufthansa lost a record EUR 984 million in 2003, with the airline feeling the pinch not only from a sluggish economy and passenger worries about terrorism, but also the competition posed by low-fare carriers.

Analysts were questioning the wisdom of Lufthansa’s move to charge for a “service” which amounts to a normal procedure of selling a ticket, coming at a time when no-frills airlines like Ryanair and EasyJet are posing stiffer competition.

Some analysts point out that for the same cost as the service surcharge planned at Lufthansa, customers can make an online booking for a complete flight in Europe.

In a commentary in the daily Die Welt, the paper called Lufthansa’s move an “own goal” and criticised Lufthansa for “not even making the effort to provide a credible explanation”. The paper said that it would not come as a surprise if Lufthansa were forced to quickly rescind the service charge.


Subject: German news