Lufthansa, the German national carrier, has signed a deal to open a direct connect with Concur, the maker of software for travel-and-expense management.
Before this announcement, Lufthansa had told Tnooz that it had been interested in integrating with corporate booking systems. That notion leaves open the possiblity that the airline will make similar pacts with other T&E management tool providers, such as KDS.
Travel managers will be able to use the Concur TripLink tool to see all of their business traveler client bookings made directly on Lufthansa's website and apps, as they happen.
Here's a practical illustration given by Doug Anderson, a vice-president of travel, in an interview with Tnooz:
"As a business traveler, I can connect my Concur profile with my Lufthansa profile. The airline now knows who I am, which company I work for, and which corporate discounts I qualify for.
I can book directly at Lufthansa's website and apps and have all that data be fed back to the Concur platform, which in turn makes it available to travel management companies, travel managers, or other partners, such as ones that specialize in back-tax reclamation or duty-of-care."
Concur says the integration will go into effect in 2016. Currently TripLink is available in English-speaking markets, but the company plans to enter Europe, the Middle East and Africa -- perhaps as soon as this autumn.
As part of the integration, travel management companies (TMCs) that use Concur can service the bookings that go through the direct channel for the first time. If they use Concur's Complete solution, TMCs can service these itineraries in a full-service way, such as for cancellations and duty of care management.
For the airline, there is a benefit in cutting down on cheaters, too. It's well known that many employees leave companies but continue to use the corporate discount codes long after they're allowed to.
Direct connects with Concur cut down on that. By linking a traveler's Concur profile with his or her Lufthansa profile, the airline can enforce and verify that only qualified customers are able to use the discounts.
Part of an airline trend
Concur has added other airlines recently, such as Air Canada, Etihad, and United, which are in various stages of integration with its systems.
All of these airlines are eager to boost direct bookings by business travelers because direct contact enables more nuanced and profitable merchandising and encourages repeat business for a client's leisure travel booked outside of the program, in a halo effect.
Today, about 20% of air bookings across all airlines are made directly with suppliers without control or visibility for travel managers, estimates Concur. That's up from 10% a few years ago.
By adding travel-and-expense management support, airlines may generate more direct bookings and therefore avoid some of the charges added on via third-party channels.
Lufthansa's (in)famous planned Euro 16 fee
Among the airlines, Lufthansa stands out because of its plan to add, starting 1 September, a surcharge of Euro 16 to every booking made through one of the three global distribution systems (GDSs) or through similar middlemen channels.
No other airline has attempted such a charge.
Anderson said it's still too early to know how its customers will respond. But he said Concur has received feedback from clients that falls broadly into two camps.
One camp sees the Euro 16 fee as another cost to be avoided. For them, Concur aims to use TripLink to help companies drive employees through channels where this fare differential will not apply, typically, the direct channel.
The other camp intends to treat the upcoming Euro 16 fee as another cost of doing business.
These companies have programs built on distribution channels where the fee is going to apply, and they will have to absorb the fee in many situations because they've already invested in TMC partners and booking tools. Plus, they may prefer the breadth of price-comparison provided by GDS-backed channels.
Simplistically speaking, the Concur integration is built off of, and made possible by, Lufthansa’s Open API, which debuted this past spring.
But there are a multitude of APIs involved on both sides that need to be mapped together for the data exchanges. The data includes a lot of detail, such as the ticket's class of service and any ancillary purchases.
Receipt data on the final actual trail of purchases, including ancillaries purchased during the trip, can be added in, tracked, and reported back to the travel managers and the airline, thanks to the API interactions.
In other news and at the other, leisure end of the market, Lufthansa said today that it may start copying the budget airline model of charging for hand luggage and other extras as of 1 October for intra-European flights, according to interviews with top executives reported in Süddeutsche Zeitung.
That's quite a somersault for an airline that had prided itself in being a full-service, high-end airline that remained above the fray of the fee-loving budget airlines such as Air Berlin and Ryanair.
The new lower prices will likely push Lufthansa tickets higher up toward the top of results in price-comparison search engines. But those lowest prices will only be available if you book direct with the carrier.
Already the airline is pushing price-comparison sites like Skyscanner to only show links to its direct channels for bookings and not to let consumers know of third-party options.
The fee for carry-on bags would be added to the Light bundle of fares, one of a few fare families Lufthansa introduced earlier this month.
Additional reporting by Linda Fox.
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NB: Image of tired worker seen from above via Shutterstock.