Lufthansa CEO Carsten Spohr has apologised to travel buyers for deficiencies in the airline’s direct booking portals, but defended the decision to introduce the €16 GDS booking fee.
Speaking at the GBTA Europe conference in Frankfurt, he said: “I need to apologise to you, because we are we are not in perfect shape yet, in providing you with the interfaces you’re asking for. We need to improve the technology, we have a good understanding of what you need and want.
We should have done it better – and that's what we are working on now.”
But he said a distribution fee had always been charged, but paid for by every customer: “Now it’s only paid only by customers that actually use the channel. It’s more transparent and fair to allocate the cost to those who use it.”
He said new distribution models are the future of the industry. “Airlines, like any other consumer-orientated company, want direct contact with customers. We want to gather the data about our customers, we see this is big value for us.”
He said he has no doubt other airlines will follow Lufthansa’s move, and pointed to a record 83 per cent load factor across the group, as proof that DCC had not harmed revenues.
As one of the world’s largest airlines, “it is a joke” that Lufthansa Group only commands 3 per cent of global market share, said Spohr. “We need consolidation quickly,” he said.
Consolidation is particularly essential in Europe. “It’s obvious by the numbers,” he said. While the top five airlines in the US enjoy 92 per cent of market share, in Europe the top five – AirFrance-KLM, IAG, Lufthansa Group, Easyjet and Ryanair – have just 45 per cent share. “Be it lobbying the EU or synergies, we’re just too small, all of us.”
He added: “I'm sure there will be consolidation – the next downturn is around the corner, and we all know how volatile the airline industry is.” He said that Lufthansa “definitely needs to be an active participant” in consolidation, which is why the group is focused on positioning Eurowings in the LCC market – a sector that he said is over-populated with an unsustainable nine major LCC airlines in Europe.
Spohr also apologised the for the week-long strike that affected many GBTA delegates’ journeys during the conference. He said Lufthansa Group was paying a “high price” for making essential structural changes. “Resistance is high among various labour groups, but we have to overcome this to make sure the company is fit for the future”, he said.