Lufthansa Sabre Agreement: What Does It Mean for the Travel Industry?
Lufthansa, the German airline giant, recently signed a new distribution agreement with Sabre, one of the world’s leading global distribution system (GDS) providers. This agreement is expected to have significant implications for the travel industry, as it changes the way Lufthansa fares and services are distributed and marketed to travel agencies and consumers.
So, what does the Lufthansa Sabre agreement entail, and how will it impact the travel industry? Let’s take a closer look.
New Distribution Strategy
Under the new agreement, Lufthansa will move away from the traditional GDS distribution model, where airlines sell their fares and services to travel agencies through GDSs like Sabre, Travelport, and Amadeus. Instead, Lufthansa will adopt a direct connect model, where it will sell its fares and services directly to travel agencies and consumers via its own NDC (New Distribution Capability) platform.
This means that Lufthansa’s fares and services won’t be immediately available on Sabre’s GDS platform. Instead, travel agencies will have to access Lufthansa’s NDC platform to book Lufthansa flights and services, either directly or through a third-party aggregator.
Benefits for Lufthansa
Lufthansa’s decision to switch to a direct connect model is driven by several factors. One of the main reasons is to gain more control over its distribution channels and customer data. By selling directly to travel agencies and consumers, Lufthansa can collect more customer data and insights, which it can use to personalize its offerings and improve customer experience.
In addition, Lufthansa’s NDC platform will offer more flexibility and options for booking Lufthansa flights and services, allowing customers to customize and bundle their travel options. This will also enable Lufthansa to offer more ancillary services, such as seat upgrades, baggage fees, and lounge access, which can generate additional revenue.
Impact on Travel Agencies
The Lufthansa Sabre agreement will have a significant impact on travel agencies, as it changes the way they access and book Lufthansa flights and services. Travel agencies will have to adapt to the new distribution model by integrating with Lufthansa’s NDC platform or using a third-party aggregator that connects to Lufthansa’s platform.
This means that travel agencies will have to invest in new technology and resources to keep up with the changing distribution landscape. They will also have to negotiate new commercial agreements and terms with Lufthansa, as the direct connect model may impact their revenue streams and pricing strategies.
Overall, the Lufthansa Sabre agreement represents a major shift in the way airlines and travel agencies distribute and market their products and services. While it may create some challenges and uncertainties in the short term, it also presents new opportunities for innovation and collaboration in the travel industry.
