Lufthansa Expects Corporate Direct Connections Early Next Year

Lufthansa German Airlines is connecting its Farelogix-powered direct connect with corporate clients and expects to announce a couple of implementations "at the beginning of 2016," chief commercial officer Jens Bischof said this week at The BTN Group's Business Travel Trends & Forecasts conference in New York.

"We have currently our two biggest corporate customers in the works of being connected," he said, adding that Lufthansa is "working together with the TMCs and the customer."

In June, Lufthansa announced its controversial commercial strategy that included surcharging global distribution system bookings, effective Sept. 1. It since has embarked on a direct-connect initiative to enable users a way to avoid the fee and eventually access differentiated content, said Bischof.

Last month, the Lufthansa Group announced direct connect technology partners, including Travelfusion, a United Kingdom-based content aggregator and tech provider that has worked with such travel management companies as Egencia and Hillgate and with corporate booking tools powered by Amadeus, Sabre, Concur and KDS. Other technology providers include DCS Travel Technologies, InteRes, Peakwork Software, SoftConEx and

Lufthansa Group exposes its direct connect via a Farelogix application programming interface. The company noted that corporate partners can build directly to the API or "make use of a technology and/or agency partner with an existing IT-Link," according to the company.

"I can tell you the first month we were already able to implement, especially European-centric, quite a few direct connect solutions with tour operators, with wholesalers, with distribution consolidators, and already we're working on the first direct connect solutions with major corporates, which we're going to announce at the beginning of the year," Bischof said. The airline group previously named German-based wholesaler Aerticket and tour operator Bucher Reisen as travel sellers that have enabled direct connect bookings.

Lufthansa also announced participation in the Book on Google feature via the Google Flights metasearch system for United States-based users.

While corporate direct connects will at first focus on "the necessary functionality" to facilitate a transaction, Bischof said, "I do believe that bringing along richer content and giving the customer an idea of what he or she is purchasing is something straight after that. It will come, and we will of course be able to display pictures, videos but also other information."

Asked how Lufthansa would replicate mid-office and back-office functions supported by the GDSs, such as reporting, Lufthansa replied in a statement to The Beat: "Already today there are a lot of technology providers which ensure corporate's mid- and back-office functions. Lufthansa will not replicate those functionalities but rather cooperate with those technology providers and provide capable interfaces to allow for feeding existing functionalities and modular setups."

Bischof also expects direct connect to enable negotiated corporate fare bundles, a concept also discussed by other airlines.

Through such corporate-specific fare bundles, Lufthansa would, for example "define whether this is the last seat of the house and what services are included__two bags, lounge access, healthy food choices or fast-track," said Bischof. "There are so many possibilities which you can incorporate in one fare bundle and make that exclusively available for one corporation. This will take us a little while. My estimation: 24 months rather than 12 months."

Meanwhile, Bischof discussed how Lufthansa's newfound "distributional freedom" could pave the way for a "best-price guarantee" on Lufthansa's websites, for example, as well as differentiated content for direct connect users.

"Maybe I don't want to include everything in every channel," he said. "That is the distributional freedom we gained by renegotiating the GDS contracts."

As such, Bischof does not see an opening to re-engage as a full-content participant in the GDSs. "Full-content agreements reflect the past, where there were no other choices or not a lot of choices for distributing your content, your pricing, your availability and so on," he said. "Once you've taken that step forward, I think there will be no way back."