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Lufthansa and corporate travel agents agree first direct connect deals

Posted by Ben Irelandon
Lufthansa and corporate travel agents agree first direct connect deals

Lufthansa Group has signed partnerships with two travel management companies for Direct Connect deals which cut out the €16 distribution fee that agencies are charged on global distribution systems (GDSs).

At a media briefing on Thursday, the airline said it is also in conversations with a number of both small and large leisure agencies in the UK about rolling out similar deals.

Tui’s German division also has a Direct Connect agreement with its compatriot airline group, which includes Swiss, Brussels Airlines and Austrian Airlines flights.

Andreas Koester, senior director sales UK at Lufthansa, introduced the new travel management company (TMC) partners – Portman Clarity and Click Travel, whose deals will go live on May 1.

Both will get differentiated Lufthansa Group content, such as exclusive promotions and new offers such as fare bundles. He said benefits to partners could be bespoke, such as food and drink packages, extra legroom or other family-oriented extras.

Koester explained that TMC agents will see the results appear alongside those of their GDSs but offer more choice of Lufthansa flights.

Simon McLean, executive chairman of Click Travel described new distribution capability as “the future” and said the Direct Connect offering gave them eight potential Lufthansa options between London and Munich while a GDS offered no more than three on board Lufthansa.

Speaking to Travel Weekly, Koester said the airline was in talks with UK agencies – big and small – about organising Direct Connect deals, but would not reveal which companies.

He said: “It’s easier with leisure agencies because there are less amendments and changes of dates.”

When asked about the impact of the distribution cost on UK sales, he said the market had fluctuated but that the airline’s results, announced on Thursday morning, were positive.

The move to add a distribution cost was seen as a risk when first announced by Lufthansa in June 2015, but Ukraine International Airlines followed suit earlier this month.

Koester added: “We don’t measure the success of this differential on the fees on whether any other airlines have or haven’t followed us.”

Lufthansa Group experts and its UK sales team will be hosting a Distribution Dialogue event this September in London for agencies interested in agreeing deals.

Koester added: “We will continue our dialogue with the local trade and continue our successful path to enhance the distribution landscape in order to remain first mover in offering smart, customised, dynamic content to our customers.”

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