Lufthansa’s controversial move to add a €16 charge onto all GDS bookings has seen bookings shift to competitor carriers according to one leading European OTA.
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Phocuswright 2015: Lufthansa losing share to rivals after imposing €16 GDS fee, says eDreams
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Lufthansa’s controversial move to add a €16 charge onto all GDS bookings has seen bookings shift to competitor carriers according to one leading European OTA.
Speaking at this week’s Phocuswright conference in Florida, eDreams ODIGEO chief executive Dana Dunne said the move had had no impact on its German or global sales.
But he added: “What’s happened is that Lufthansa’s sales have gone down by a large percentage and competitors’ have gone up by an extremely large percentage.
“We have seen no material change with our booking patterns, except a shift away from Lufthansa to others.”
Amadeus president and chief executive Scott Gutz, said the GDS was still working actively with Lufthansa on distributing its fares and ancillaries through agents.
He said: “Maybe they will have a change of perspective when they see what can happen when they work with agencies rather than trying to cannibalise them.”
Dunne and Gutz discussed the Lufthansa situation as part of a panel debate on who is making money out of selling air.
Gutz said the current situation in north America is that there are four mega-airlines controlling 80% of the market, one of which does not participate with the GDSs.
“For the other three, it’s paramount that full content is in place – access to seats, ancillaries and fare families.
“The expectation in the marketplace is all that is made available. People are going to be expected to search on those items and not just get the lowest fare back.
“As the technology platform in between [agents and airlines] we are allowing travel agencies to upsell all of the ancillary and additional products.
“Fundamentally making that available to the travel agencies is beneficial to them and to the airlines, to get incremental revenue streams from the indirect channel.”
Dunne said the market in Europe was very different to the US with 120 different airlines and rather than 80% of traffic being domestic the same proportion is international.
He said: “We provide the shelf space for airlines to help consumers navigate a more complex field than there is here in the US.”
Also on the panel was Werner Kunz, chief operating officer of CheapOair, one of the OTAs that Delta Air Lines has pulled flights from as it looks to combat commoditisation of its product.
Kunz said the business, CheapOair is one the brands owned by parent Fareportal, still sells Delta but over the phone or via other direct communication routes with customers like chat or email.
“We have an excellent relationship with Delta. The high touch high tech approach is very appealing to airlines,” said Kunz.
Gutz said: “We have a full content agreement with Delta. That said they still ultimately determine point-of-sale and who is allowed and who is not allowed to sell them.
“We are investing heavily in merchandising so they [agents] can prove to Delta the indirect channel works, prove the value that goes back to Delta.”
Earlier Tim Mapes, Delta’s senior vice president marketing, defended the airline’s policy of restricting data to certain channels.
“We will continue to do that and we will not open up to a mass audience. Our strategy is to continue to move where our premium demand exists and we will continue to serve that.”
Mapes said Delta has spent $8 billion on the product in recent years and it would not allow it to appear on platforms that present it in a commoditised way.
“Distribution is as strategic as the product itself. It’s not our intention to be commoditised in that we will sell our product anywhere.
“We have to have distribution and shelf space, that does not mean it is any distribution, it has to be quality distribution.”
