Comment: Lufthansa’s levy will test agents’ mettle

Comment: Lufthansa’s levy will test agents’ mettle

Advantage’s corporate director, Ken McLeod, didn’t mince his words when he reacted to Lufthansa’s announcement that it is to impose a €16 fee on GDS bookings.

What Ken is acutely aware of is that what the German flag-carrier is proposing potentially represents a watershed moment for agents, be they leisure or corporate.

I remember similar fury when British Airways led the way in agency commission cutting from 2000 and when Thomson cut base commission to 7% in 2005.

In both cases, market leaders stuck their heads above the parapet, took the initial flak but ultimately led a fundamental shift, prompting the trade to totally rework its business.

Ken knows Lufthansa has just lobbed in a similar grenade – one that other airlines will follow with relish if sales aren’t too adversely affected.

So what can be done? Can the trade’s collective power force a reversal of Lufthansa’s decision, or at least a watering down?

We’ve seen, in recent years, how cruise lines did a U-turn on commission cuts. But aviation is very different and airlines wield significant power, particularly in times of low fuel prices.

What rankles most is the way in which this fundamental change appears to be being foisted on the industry with no consultation or warning.

In my experience, agents aren’t averse to change. They realise that the part they play is about adding value for the customer.

You just wonder, sometimes, whether suppliers fully weigh up the value that non-direct channels offer, having convinced themselves that direct distribution is the ‘promised land’.

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