Lufthansa To Eliminate Commission Next Fall

Lufthansa on Sept. 1, 2004, will abolish all payment of travel agency commission in Germany. The airline said it will introduce what it called net pricing because it believes the responsibility for remunerating agents for their services lies with their customers.

Germany's flag-carrier is not the first airline in Europe to move to zero commission. British Airways adopted zero plus a flat booking fee in 2001 but switched to 1 percent last week. SAS has gone to zero in Scandinavia, as has Finnair in Finland, while almost all of Europe's proliferating hordes of no-frills airlines have never paid commission.

"We were prepared for this," said Chris Hunt, German travel manager for the electrical appliances manufacturer Electrolux. "We have seen it coming for several years. It gives us price transparency, but the only problem is what happens to fares. We would expect there to be a decrease, otherwise this amounts to a price rise for us."

Gerd Otto-Rieke, spokesperson for German travel managers' association VDR, said: "We are not surprised. A lot of companies will welcome it."