September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
21 November 2022, Hilton London Metropole
Fraught business relationships never lead to success. That’s why business travel professionals are baffled at the behaviour of Lufthansa, which has actively caused tension and distrust within the third-party distribution community.
It’s just like any personal relationship – once the trust has gone, it’s almost impossible to recover.
There are probably a million reasons why Lufthansa introduced a global distribution system (GDS) fee. The most obvious – and no doubt highly pressing – is the need to cut costs, and quickly. However, in times of crisis, we all know we need our friends around us. For Lufthansa to reward those who have supported it with no consultation, no understanding and no warning of a major commercial shift is bad business sense.
There has been a very public backlash against the airline, both by those in the business and leisure travel arenas. The battering to its reputation doesn’t appear to be of concern to Lufthansa. Not immediately anyway.
That’s the problem with this whole situation: Lufthansa has put short-term gains ahead of everything – even common sense.
Undervaluing the role of third-party distribution is not a good long-term strategy. The apparent solution, to offer travel management companies (TMCs) access to direct fares at its own website, lacks a basic understanding of the professional travel management sector. The lack of usability of the site means that very few TMCs will ever use this booking channel.
The GTMC’s member community has been pretty vocal in its favour of working with airlines that offer mutually beneficial terms. Simple collaboration is all it takes to build decent long-term business relationships.
The public statements of other airlines to express that they will not follow Lufthansa’s GDS fee model shows how seriously the aviation sector takes this issue. Watching Lufthansa sever its relationships with those who delivered sales must be painful. No professional business wants to see bad behaviour tarnish its sector.
The good news for those airlines prepared to take a stance against a GDS levy is that this is cementing relationships with the TMC sector. These stronger partnerships will breed the kind of success that Lufthansa won’t be able to achieve alone.