Airlines, airports find new ways to tighten the screws on travelers


It literally pays to travel defensively these days as airlines, airports and others find new ways to turn the screws a little tighter on the customers they're supposed to be serving. 


Lufthansa challenges online travel agencies

I've never been a fan of buying airline tickets through third-party booking sites. Rarely do they beat the fares the airlines charge for booking directly, and they can come with more restrictions, higher change fees and hassles should you have a problem.

These sites, however, are easier to use than the airlines' clunky and cluttered websites. My aunt recently became so frustrated trying to use American's website, she booked on Expedia instead. At the very least they allow you to comparison shop for prices, connections and flight times in a way that would take hours if you had to go to airline sites one at a time. 


Lufthansa's clunky fare display 

Airlines hate this idea, of course, and have been doing anything they can to steer customers directly to their sites where they can promote profitable extras such as roomier seats, early boarding and premium meals.  

Lufthansa Group got out the big guns this week by announcing that it will penalize travelers who buy through online agencies such as Expedia and Priceline by adding a 16-euro ($17.80) surcharge onto the price of the ticket. The charges go into effect Sept. 1, and also apply to flights on Austrian Airlines, Brussels Airlines and Swiss. 

Fares appearing on sites that sell tickets, such as Expedia, will rise, while Lufthansa's fares will appear the most attractive on metasearch sites such as Kayak, which direct users to both airline and third-party sites to make their purchase. 

Lufthansa cited the high costs of maintaining the global distribution systems - the flight inventory and fare databases used by online travel agents - as well as the financial advantages of selling extra services via its own website. 

For an example of how fares might look if Lufthansa's new policy was in effect today, I searched Kayak.com for a non-stop, round-trip fare, all taxes and fees included, between Seattle and Frankfurt in October. JustFly came up the lowest price of $1516, followed by $1531 on seven other sites including Lufthansa's. Expedia's fare, not shown on Kayak, also was $1531. 


Kayak's easy-to-read fare display 



Had the $17.80 surcharge been in effect, Lufthansa's fare would have been featured on Kayak as the lowest at $1531, followed by JustFly at $1533.80 and then all the others at $1548.80.

Other airlines are considering following Lufthansa's lead, Reuters News reports. Air France-KLM is considering its options, the airline's chief executive said, although no decision has yet been made.


"It's a key issue, an absolutely key issue for us. The majority of our revenues comes from GDS," Alexandre de Juniac told reporters on the sidelines of a meeting of the International Air Transport Association (IATA). Reuters reports that other airline CEOs attending the industry meeting, such as  Alaska Airline's Brad Tilden, applauded Lufthansa for its decision but remained coy on whether they would follow suit.

In the meantime, the online sites, which generate lots of business for the airlines, will no doubt find ways to push back. One option is to drop Lufthansa Group flights from their listings as Expedia did with American Airlines a few years ago after American pulled its flights from Orbitz over a dispute over fees. 

As usual, it's had to see how the consumer will come out the winner on this one. 

Shame on Schiphol   

Let's start with dynamic currency conversion, a legal scam  popular with some European retailers and hotels, and now in effect at Amsterdam's Schiphol airport.  

The scheme works like this: You pay for a purchase with your credit card, and the merchant offers to convert the charge from euros to U.S. dollars on the spot so you don't have to do the math in your head, or wait until you get home and see the bill. 

Retailers are supposed to ask whether you want to be charged in dollars or the local currency, but they don't always. And even if they do, chances are they won't mention that this  "service'' comes with a fee, usually 3 percent, on top of whatever foreign currency transaction fee your credit card issuer might charge.  

It turns out that the registers at Schiphol's duty-free shops are programmed to default to showing charges in the credit card user's home currency. To avoid being charged a conversion fee, travelers must actively select "euros'' at the time of payment rather than press the automatic "OK'' button as I did recently when purchasing a bottle of limoncello. By doing that, I unknowingly opted for paying in U.S. dollars. My slip showed a total price calculated using an exchange rate of $1.15 compared to $1.12 on charges I made elsewhere the same day. 

Shame on Schiphol. You'd have to be wide awake to catch this one, as hardly anyone passing through this airport is.

Sneaky checked bag fees

Most of the smaller, discount airlines place weight and size limits on carry-on bags, meaning most passengers, especially those traveling through from overseas, are forced to check...and pay. Air Baltic, and not doubt some others, has a tricky way to get its customers to pay more.

Unsure when I booked ticket from Rome to Riga whether my carry-on bag would meet the airline's requirements, I waited until after I made my reservation to check the fine print, thinking I could make a decision to pay the fee later by going into my online booking. This was a costly mistake. The 25 euro fee for checking a bag goes up to 35 euros for paying online after making your booking. Wait until you arrive at the airport, and it's 40 euros. 

I'd like to see the U.S. Department of Transportation require airlines to refund checked bag fees if luggage is damaged, delayed or lost. It wouldn't apply in this case, since Air Baltic is a foreign carrier, but I thought about it anyway when the clothes and papers inside my suitcase arrived wet because the bags had been left on the tarmac in the rain. 



4 comments:

  1. According to Visa, the Dynamic currency conversion is allowed to be offered, but is not to be the default and cannot be done without the purchaser's express permission. Marriott Hotels was/is doing this in some cities, where it was defaulting to the "home" currency. Apparently it is allowed to do a "chargeback" to the merchant, which would force them to reprocess the charge in the proper currency as well as generate some negative ratings for them with the credit card companies.

    Schiphol, Marriott and anyone else who tries this should indeed be penalized. It is a cash grab.

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