Lufthansa has this week issued its third quarter results, the first to have been released since the introduction by the airline group of a €16 Distribution Cost Charge (DCC) on 1 September.
To see whether there has been any change as a result of the introduction of DCC, we look at the figures for Q3 this year compared to last.
The chart shows the breakdown of operating income for the passenger airline group which incorporates Lufthansa, Swiss, Austrian and Germanwings.
The first thing to notice is that overall income has increased, by some 5.4% year on year.
We use the same period from the previous year rather than comparing Q3 to Q2 because traffic patterns follow similar patterns between years. Higher passenger traffic and better exchange rate partly explains this growth. Yet the airline says that in the first nine months of 2015, fares were down by 4.4% on the same period in 2014. If the booking channel profile and market conditions remained unchanged, you would expect the introduction of DCC to increase fare revenues.
The next thing to look at is costs. Most elements of Lufthansa's cost base have remained unchanged between 2014 and 2015. However fuel is much cheaper this year, meaning earnings (the top chunk of the column) have grown considerably, by 75% to more than a billion euro.
If we are interested in DCC, the other cost we should look at is the 'Other' operating expenses contribution. This is where distribution costs are accounted for and this category has decreased by 7% year on year. If all else were equal and DCC had no impact on the number of bookings being made via GDS you would expect this figure to remain fairly steady. If the number of bookings made via the GDS is falling, you would see this figure fall.
Without having more detailed figures or commentary from the airline, it is hard to know whether there has been a significant shift but there are some interesting movements that we will continue to watch in the coming quarters.
In the meantime, subtle shifts are happening in Lufthansa's key market.
The airline last week announced that it had reached agreement with a number of distribution partners to extend its direct connect offering.
Of most interest in the corporate space was the announcement of a deal with the independent travel agency chain Lufthansa City Center which has agreed to develop an alternative distribution channel based on Direct Connect. "This new channel provides direct access to the exclusive offers of the Lufthansa Group airlines without the application of the Distribution Cost Charge (DCC)," the airline said.
The airline has also announced that people using Google Flights metasearch in the US will be able to book directly with the airline within Google, the first time this has been possible.
"The partnership with Google will facilitate online bookings particularly on mobile devices," said Lufthansa's CCO Jens Bischof. "With 'Book on Google' users have a seamless booking experience on Google Flights. Lufthansa is the first legacy carrier world-wide to which Google Flights offers this direct booking function. With 'Book on Google' we will strengthen ticket sales in this channel. This is an important step in realising Lufthansa's new sales and distribution strategy, which strives to modernise existing booking processes as well as to develop new and alternative distribution channels."