GERMANY: Lufthansa Market Share On Business Flights Goes Down

Lufthansa’s market share of business travel flights between the UK and Germany dropped 8.5% in the three months after it imposed a €16 charge on all GDS bookings.

According to figures released by the GTMC, whose members make up the majority of UK travel management companies, Lufthansa’s market share was 32.9% in June but dropped to 24.4% in November.

Lufthansa’s controversial €16 GDS transaction fee has had a “detrimental” affect on the airline’s business travel sales, according to the research.

The data, compiled by the 7R Group, compared the market share won by the Lufthansa Group, for flights from the UK to Germany between June and August 2015 (pre charge being applied) and then September and November (post charge). It is a sample of approximately 12,000 transactions in total and the flights were all booked via the GTMC’s members. They are UK based TMCs (Travel Management Companies) and are concerned primarily with business travel.

Paul Wait, chief executive of the GTMC said “We predicted that the Lufthansa charge would upset and put business travel bookers off. They haven’t booked directly with Lufthansa as they hoped, instead, they have voted with their feet and taken their business elsewhere. In this highly competitive market, we believe, this charge has done some obvious damage to Lufthansa’s market share. It is a flawed and failed strategy which should be reviewed.”

A Lufthansa official said:

“These figures only represent the volume of bookings made though the GTMC channels and do not take account of increases in the bookings through other avenues. The fact is that we have sold more tickets online via our own online channel LH.com where the share has risen from 29% in June 2015 to 35% in December 2015.”

“Looking at bookings across the Lufthansa Group we cannot see any decrease due to the introduction of the DCC on September 1, 2015. As published in our Q3 results, the Lufthansa Group is heading towards a record in 2015. The published traffic figures for the later months of 2015 were influenced by the biggest and longest strike action in the Lufthansa history.

“Even taking this into account, we cannot see any switch away from Lufthansa.”

EasyJet grew its market share as did other airlines, while British Airways’s remained steady, according to new information from Guild of Travel Management Companies (GTMC) members.