THE DISTRIBUTION DISSIDENT
Many shrugged off Lufthansa's €16 GDS booking fee as a negotiation tactic in 2015. Bischof stands by the strategy as the carrier pursues direct connects. With Lufthansa Group passenger volumes reaching record levels last year, Lufthansa awaits copycats.
When Lufthansa first announced its €16 fee on bookings made through global distribution systems, many shrugged it off as a negotiation tactic or a gambit doomed for a quick reversal. Chief commercial officer Jens Bischof, the man behind the controversial fee, remains quick to say it has a broader purpose. “It’s not about the fee or the charge,” he said. “It’s about broadening the choices of distribution and lowering the cost of distribution by enhancing the possibilities we have in displaying our products and service.”
Since the June 2 announcement, Bischof and other Lufthansa executives have maintained that the strategy eventually will become a new standard for the airline industry, particularly as GDS contract expirations, and thus negotiations, roll around for other carriers. Even though no major European or U.S. carriers yet have joined Lufthansa in assessing the fee, the move already has influenced Lufthansa’s relationship with others on the supply chain. In June, the first month, Lufthansa established direct connections with some Europe-centric wholesalers, distribution consolidators and tour operators. Now, the carrier is working on a direct-connect solution with two of its biggest corporate customers, which it aims to have in place this year, Bischof said.