With A ‘Neutral’ Impact From GDS Fee, Lufthansa Banks On Channel Shift

When Lufthansa Group in mid-2015 informed the market of a new distribution strategy, one stated objective was to lower associated costs. The company expects to prove wrong the skeptics and start achieving that by the end of 2018. Lufthansa's financial reporting does not offer enough detail to completely validate progress, but there are indicators of short-term pain for long-term gain.

The group's network airlines, Austrian, Brussels, Lufthansa and Swiss, since April 2015 have paid "rack rate" GDS segment fees . . .

Author: David Jonas

David Jonas in 2006 co-founded business media firm ProMedia.travel after ten years as a journalist with Business Travel News. David rejoined BTN in 2010 as executive editor when its parent company acquired ProMedia, and in 2014 co-created The Company Dime. David has a bachelor's degree in communications from Cornell University.

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Chris Dane
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Chris Dane

By any measure — costs, ROI, channel shift, etc — LH’s strategy has failed. And their real problems remain high-cost employees, employee morale and competitive hubs gaining share … none of which this strategy addresses. Now with fuel costs rising to the highest level in 3-4 years they are discounting fares if the traveler comes direct. What could go wrong with that?