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CWT: Fundamental Issues with Lufthansa’s direct connect approach

In September 2015, Lufthansa implemented an additional fee for distribution through the GDSs, which is applied directly to tickets at the point of sale.
On 4 November, the Lufthansa Group (Austrian Airlines, Brussels Airlines, Lufthansa and SWISS) announced its plans to enable direct connect solutions with various industry partners as well as new “exclusive offers” outside of the GDS.

Scott Brennan, Carlson Wagonlit Travel (CWT) executive vice president and head of Global Supplier Management, says, "Despite concerns raised directly to Lufthansa by CWT and many others in the industry, Lufthansa has continued to make significant changes to the booking process offered to clients and travelers with the addition of a €16 fee for each GDS booking.

"As a TMC, one of CWT’s key roles is to help ensure our clients have access to complete and competitive travel options. CWT believes the fundamental issues with Lufthansa’s direct connect approach are:
• Fragmentation of content that creates complex, manual searching and booking
• Less comprehensive comparison shopping resulting in reduced visibility of competitive fares
• Limitations for TMCs to communicate directly with travelers or to assist with travel changes or during emergencies
• Fragmented data for reporting and traveler tracking
• Additional cost – even if Lufthansa’s €16 fee is avoided – to bring bookings made directly with Lufthansa back into the managed program and to manage inefficiencies and complexities related to changes, exchanges, refunds, invoicing and reporting

"CWT believes no viable solution exists to avoid the €16 distribution fee without resulting in increased cost to maintain existing services and value for our clients. Given this, CWT continues to believe GDSs present the most efficient, complete and cost-effective distribution solution currently available for the corporate travel industry."

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