Earlier this week Lufthansa's regional director Christian Schindler, GTMC Paul Wait and independent consultants Scott Gillespie and Paul Tilstone discussed the implications of Lufthansa Group's intention to levy a distribution cost charge (DCC) on any booking made on the GDS on any one of its carriers. You can view the recording of the first BTiQ broadcast here.
They shared many wise words. However, there were also many questions and comments from viewers, far too many for the time allotted so Business Travel iQ thought it would be beneficial to share what the buyers watching the discussion had to say.
Although the volume was high, the overlap was also great and there were three areas of concern:
Several corporates expressed anger at not having not been consulted prior to the move. As one said, "I have not yet spoken with a corporate that was consulted on this move."
Others sounded merely sad – "Are they aware – and do they care – that they are hurting their relationship with their corporate customers - both travel management companies and procurement?
Another element of this was cynicism about Lufthansa's contention that this is part of an initiative to give customers what they want. As one said, "I don't understand how you can state that your customers are requesting this and your move is targeted for your customer. You're diluting the customer experience and then charging them to add this back on".
Challenges and alternatives
One asked if Lufthansa was prepared to share the data that would be lost if the corporates went direct. Another asked Lufthansa how it was now going to tackle corporates' need to fulfil duty-of-care obligations and handle rebookings.
Some were frustrated – "You are implementing this fee without a solution for the corporates" but others were already looking ahead to solutions. One asked "Will this portal also become available via the OBT to avoid offline/agent fees which might accrue from using lh.com?"
Value and the supply chain
A look at the whole supply chain – one buyer was concerned at "lack of a credible alternative and zero customer consultation" but did add "This does, however, force other members of the supply chain, eg GDS and TMC to demonstrate their value which is a good thing."
In sum, like customers anywhere corporate buyers want their concerns listened to and acted upon. But they are also looking for solutions such as how will they get the data they need or make the rebookings – indeed all they need to do without adding extra complexity, and cost, to the process.
As the discussion suggested, there is no doubt that other players in the supply chain, namely TMCs and GDSs, add value. Lufthansa has now just asked if the price of that value is €16 per booking.
The market will shortly have the opportunity to answer.