Report: Lufthansa GDS Bookings Down In September

Even before the Lufthansa Group began levying a €16 surcharge for global distribution system bookings on Sept. 1, some travel agencies and travel buyers reported that they intended to book away from the carrier. A Tnooz report published today, citing a "highly confidential document" circulating among Sabre Travel Network executives, shows Lufthansa Group carrier bookings, at least in the GDS, have indeed taken a hit in the first two weeks of September.

The report and associated documents show that Lufthansa Group bookings transacted in Europe via the three major GDSs—Sabre, Travelport and Amadeus—fell 16.1 percent year over year from Sept. 1 to Sept. 14.

Non-Lufthansa Group carriers, meanwhile, on average saw a 4.3 percent rise in GDS bookings for the period. Including Lufthansa, airline bookings among GDSs in Europe rose 1.4 percent, according to the report.

Competitors Air France, British Airways and Alitalia saw GDS bookings increase 10.7 percent, 4 percent and 8.4 percent, respectively, the Tnooz report showed.

Yet, the biggest gainer in the two-week snapshot was not a major competitor but rather United Airlines, a Star Alliance and Lufthansa codeshare partner. United's bookings rose 12.8 percent year over year during the period. Meanwhile, Star Alliance partner Scandinavian Airlines showed booking growth of 3.2 percent.

Several agencies and buyers had indicated plans to book Lufthansa flights by way of codeshare partners, a method that does not carry a surcharge.

While United's gain suggests Lufthansa may still be getting some bookings by way of codeshare partners, the GDS data cited by Tnooz does not capture bookings in Lufthansa's direct channels, including brand websites and its agent portal. Lufthansa has offered those channels as a way for travelers and agencies to avoid its surcharge.

Asked if the Distribution Cost Charge was negatively impacting bookings, Lufthansa Group chairman and CEO Carsten Spohr was quoted in Reuters on Sept. 2 saying, "advance bookings make me optimistic,” according to a Lufthansa translation from German provided to The Beat.

One GDS source speaking on the condition of anonymity also said there was a discernible shift in GDS bookings for Lufthansa, though few details were provided. The source said there were signs that some corporations have elected to book away, while others are seeing Lufthansa move down in fare displays sorted by price, making them less attractive in spot buys.

One corporate large-market travel buyer noted that since Sept. 1, the company has demoted Lufthansa results in the company's preferred corporate booking tool and that when Lufthansa was the best option, it was ticketing by way of codeshare partners.

Another large travel-buying organization was "in a wait-and-see" and continued to book based on lowest logical fare, in which Lufthansa now has a €16 disadvantage. The buyer, like others, viewed the surcharge as disruptive, as it supports a belief held by some travelers that better fares can be found outside of the program.

Sabre CFO Rick Simonson did not provide figures, but during the Deutsche Bank 2015 Technology Conference on Sept. 16, he commented on the impact of Lufthansa's Distribution Cost Charge. "In many cases, the travel agents and the corporation have said they are going to an alternative rather than pay that," he said. "It's essentially a fare increase, and on those segments where there's competition, they've said they will move those to other competitors. If they do, and we expect they will, those flow through the GDS as well. It still comes through the GDS, and Travel Network, Sabre's business, will still get its fair share of that. We don't see any impact in the short or medium term on our bookings."

Sabre declined to comment, while Lufthansa did not immediately reply when contacted by The Beat.