Lufthansa and Amadeus join forces to expand travel distribution
Lufthansa and Amadeus are expanding their partnership to further modernize the travel distribution and retail industry, which includes New distribution capacity.
Since the fourth quarter of this year, travel agencies using Amadeus no longer need to use third-party technology providers, or Lufthansa’s own platform, to offer fares, which are often cheaper than those available on global distribution systems (GDS) for their customers.
New reservation system for Lufthansa
The Amadeus Partnership with Lufthansa is part of a new air movement aimed at increasing bookings for the courier group. Yet in this case, it is particularly relevant for corporate travel agencies, as they book three out of four of these new distribution capabilities.
This technology also enables dynamic and continuous pricing. This is said to increase revenue for airlines and agencies, as they can offer more prices, exclusively through agencies that book with the new distribution capacity. “There were workarounds” Valmorbida said“but without reacting to the millisecond speeds demanded by the new modern and digital times.”
“It’s unique for Amadeus. The most important thing is that we can offer an end-to-end solution.… allowing Lufthansa’s full price range is important. »-Decius Valmorbida, President of Travel at Amadeus
As aviation has nothing to do with the hospitality industry, it is somewhat necessary to introduce and slowly test a “Pay as You Fly” model, however, it will definitely be more expensive regarding rates of interest with various retail suppliers. An important note of Lufthansa’s payment service is the speed with which it receives refunds, where 85% of its claimed tickets are instantly refunded.
“We believe that changing the cash flow logic does not help the industry. If you put more tickets in this last minute tranche, it would make it more expensive, this comes from a political will which we strongly oppose. »- Tamur Goudarzi Pour, commercial director and member of the management board of Swiss
Why does Germany want a pay-as-you-go model?
In August, the German state of Lower Saxony called for the abolition of advance payment for flight reservations – and the implementation of a ‘pay as you fly’ model. State Transport Minister Bernd Althusmann has called for the introduction of a “pay as you fly” (PAYF) model, in which payment for airfare is processed at check-in.
The main problem with the pay-as-you-go scenario is that airlines have to manage crews, airport agreements, and network planning, as flights can be underbooked, expensive to clear, and not entirely efficient. However, post-pandemic; all Fin-Tech programs have been relatively successful and show promise for the near future once the airlines finally settle in.
“To penetrate a market or a road, it would take years. The pandemic has changed that. As the traffic was not predictable, this delay was increased to three months. But as always, the traveler is king. With the end of the pandemic, we will see exactly where this new balance will be. »- Tamur Goudarzi For
The main introduction of this payment model is to meet the need of refunds, as they will not be needed if a passenger books directly at the airport, as they would with a bus or train ticket. The problem is that people often need time to plan ahead because the cost of air travel and rail travel are not the same.
The Lufthansa and Amadeus partnership should tackle these obstacles, because then the idea would appeal more to a wealthier population, which is not the wish of the airline.
“You don’t pay for your hotel before you leave. Ditto with your car rental. There’s definitely a certain elegance to having the same setup with the other major part of travel – the flights. Scott Keyes, founder of Scott’s Cheap Flights
Do you think the “pay as you fly model” will increase the current cost of tickets? Would you be eager to pay at the airport? Comments below.