Lufthansa Group last week filed a lawsuit against Sabre after the GDS company informed the airline group that it believes Lufthansa is in breach of contract.
The claimed breach, according to the lawsuit, came as a result of Lufthansa’s implementation of a 16 euro surcharge on all GDS bookings (implemented last September), but not on bookings made via Lufthansa’s distribution channels, which Sabre claims are also GDSs.
“Sabre now claims that two distribution channels of Lufthansa Group — its Direct Connection and its Agent.com Internet portal — should be considered ‘GDSs’ and thus be subject to the fee, even though both channels are expressely excluded from being considered GDSs under the contracts,” the lawsuit states. “Sabre also claims that Lufthansa Group is imposing an improper charge on Sabre subscribers, even though the charge is paid by passengers, not subscribers.”
Lufthansa Group’s distribution channels are powered by technology companies Farelogix and Travelfusion, according to the lawsuit.
Lufthansa is seeking a ruling on whether the surcharge complies with its contracts with Sabre, and that the airline can continue to apply it to tickets sold through GDSs but not on those sold through its own distribution channels.
In the lawsuit, Lufthansa calls GDS distribution “restrictive to airlines, as it hinders direct marketing and communication between airlines and their customers and does not support dynamically created and customizable product offerings.” It also states that GDSs charge “significant booking fees.” Lufthansa said it pays “hundreds of millions of dollars in booking fees each year to GDSs, including Sabre.”
Lufthansa said it continues to work well with GDSs and is “in active conversation with Sabre” on using technological solutions to display its products to customers. However, the disagreement on whether Lufthansa’s distribution channels are GDSs remains.
The airline group said it “is very confident that the court will confirm LHG’s view and thus allow LHG to better serve its customers and further stabilize its good business relations with Sabre.”
Sabre said in a statement it has expressed its concerns to Lufthansa on “multiple occasions.”
“Just as Lufthansa would fully expect Sabre to honor all aspects of our contractual relationship, Sabre has expressed its concern to Lufthansa, on multiple occasions, about Lufthansa’s failure to comply with its contract,” Sabre said. “Nonetheless, over the past several months, Sabre has worked diligently to understand and to be responsive to Lufthansa’s commercial objectives and we have had several constructive discussions about how our technology solutions can support Lufthansa’s business. Sabre will defend itself vigorously against this lawsuit.”
The lawsuit will not affect the availability of Lufthansa Group inventory on Sabre, Lufthansa said.