Lufthansa’s Direct Connect Play: Trend or One-Off?

Summary

Airfare shopping and booking, once a cut-and-dried symbiosis between travel agents, global distribution systems (GDSs) and airlines has begun to unravel over the past 15 years. Not that the relationships were ever particularly cordial. Airlines wanted a reduction in the fees that they paid the GDSs while the GDSs wanted higher fees to fuel their technology investments and their bank accounts. The travel agents just wanted enough money (fees and commissions) to be viable businesses. All of these potentially conflicting views put air distribution under substantial tension. Technology has become a catalyst to address that tension. Capitalizing on this tension, a major German airline, Lufthansa has a taken a 2 pronged approach: 1) A surcharge for air bookings using a GDS and 2) Encouraging its connected travel agents to bypass the GDS.