Lufthansa India has directed all agents using the Galileo system to pay Rs 200 per segment, effective September 1.
KOLKATA: A spat seems to be brewing between German carrier Lufthansa India and computerised reservation system (CRS) firm Galileo, one which could drive travel agents to make bookings through other CRS companies. Lufthansa India has directed all agents using the Galileo system to pay Rs 200 per segment, effective September 1, 2006.
In a recent communication to travel agents, Lufthansa indicated that its existing contract with Galileo expired on June 30, 2006, and, unlike in the case of other CRS companies, negotiations for a fresh contract with Galileo were inconclusive, resulting in sharp increase in costs of providing access through Galileo.
When contacted by DNA Money, Werner Heesen, general manager, passenger sales, India, and director, South Asia, Lufthansa German Airlines, said: “CRS costs are a major burden for any airline, particularly, in view of the recent development such as high fuel prices.
As per Lufthansa’s new contract with Galileo, we are confronted with an unacceptably high cost per segment for all bookings made through Galileo.
“Since many partner agents use Galileo and we do not wish to block our services and access to these partner agents, Lufthansa in India has no option but to charge a fee of Rs 200 per segment, effective September 1, 2006, on every such transaction done through Galileo.”
Heesen further told DNA Money: “This fee will not impact the final ticket prices to be paid by passengers.”
Now, agents will have to pay up the extra Rs 200 per segment till an amicable agreement is reached between the two. By segment, Lufthansa means the distance between two destinations.
For instance, the Mumbai-Frankfurt route will comprise a segment while the return leg will be considered as another segment.
Therefore, an agent when booking a round trip on Lufthansa, ends up paying Rs 400 extra.
The US-based Galileo, a global distribution system (GDS) company that connects about 52,000 travel agency locations to 425 airlines, is owned by Travelport (formerly Cendant Travel Distribution Services).
Simon Nowroz, managing director, Asia, business group, Travelport Inc, told DNA Money: “Galileo International entirely refutes this argument and does not consider either the method of collection (through ADMs) or the stated reason for this action to be appropriate or helpful to the travel trade when selling Lufthansa products…”
Nowroz further said: “Galileo International will continue to discuss with Lufthansa an arrangement which is equitable to all sides in the distribution of their content - the airline, the travel agency and the GDS. It is to be regretted that Lufthansa took this action in India without consulting with us or the travel trade first.”
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