Some have wondered aloud if Lufthansa Group has "gone mad." But others say it's just crazy like a fox.
The company has argued that the travel industry must accept freedom in distribution. That's why it is changing its commercial strategy.
De-commoditizing flights
One plank in Lufthansa's strategy is to control how its content is presented on metasearch sites like Skyscanner and Kayak.
It has recently revised some of its commercial contracts. If you are a middleman site that wants to display Lufthansa's live inventory and prices, you must agree to only show its content and not show Lufthansa flights sold through other channels.
For example, if you run a search on Skyscanner on a relevant route, you'll find that the only way to book a Lufthansa flight is by visiting Lufthansa.com.
The same is true on Kayak.
CORRECTION: 12 ET: I was wrong. Kayak is offering multiple booking options other than booking direct.
Lufthansa moves coincides with Delta's decision to remove fare and schedule data from some price-comparison websites.
Rival airline British Airways, which doesn't yet make that stipulation. You can find multiple sources for booking a BA ticket on Kayak, Skyscanner, and many other price-comparison sites.
But you can bet that Lufthansa Group's rivals International Airlines Group (British Airways' parent company) and Air France/KLM will be eyeing the effect of that contractual change closely.
Directing travelers the direct way
As of 1 September, Lufthansa will add a Euro 16 surcharge on all bookings made via a global distribution system (GDS) for tickets on Lufthansa, Austrian Airlines, Brussels Airlines, and Swiss International Airlines.
The airline says this commercial strategy change was prompted by its introduction of fare families and which, it says, has coincided with a fee hike by the GDSs.
This month Lufthansa, Austrian, and Swiss debuted an economy-class fare structure for all intra-European flights, via their websites and mobile apps.
These carriers's new fare families are Light (carry-on bag only; non-refundable); Classic (with checked luggage and a reserved seat assignment ahead of everyone else); and Flex (with no change fee for rescheduling).
The move is significant. Lufthansa Group is the first large European airline group to "unbundle" its airfare product. It is adopting a model used for some time by European low-cost carriers like Ryanair and Easyjet, and pioneered by Air Canada.
British Airways will study the move closely. British Airways has also been testing hand-baggage-only fares for a couple of years, to develop yield.
BA's imminent acquisition of Aer Lingus, which has a hybrid service model between low-cost and full-service, may push the parent company International Airlines Group to copy Lufthansa's move and adopt fare families across its brands.
The other one of the three major legacy airline groups, Air France/KLM, will also be watching the move and may already have plans afoot.
The concept isn't completely new. For instance, Finnair has long had Basic, Value, Pro, and Business fare families.
But the fare family and unbundling concept writ large are relatively new to Europe's legacy carrier giants. The shift signals that merchandizing is becoming more dynamic, as technology makes it easier for airlines to let customers decide which services they would like to pay for.
"Economy minus", or "pay only for what you need"
For instance, some business travelers may be willing to pay more for Lufthansa's Flex option, which lets flyers rebook at the last-minute on an earlier flight on the day of their departure without paying a surcharge for what may be a more expensive booking category.
Flyers have shown a willingness to forsake more expensive business class tickets, which come with better meals, lounge access, and other perks.
Travelers on Lufthansa, Austrian, and Swiss will still be able to book business class for a traditional full-service experience. They can also book one fare family on the outbound flight and a different one on the return.
Keeping frequent fliers happy will be key. As of now, one of the rules is this:
"Circle members, Senators, Frequent Travellers and Star Alliance Gold members booking Classic or Flex fares retain their familiar privileges. The new Light fare, however, does not include advanced seat reservation, additional free baggage allowance or free golf equipment allowance."
Similar changes have been made to Swiss Air.
Both price-comparison giants Kayak and Skycanner have said they have been working on using new distribution capability (NDC) technologies to enable the display of fare bundles like the ones that Lufthansa has debuted, to enable better price-comparison for travelers.
The major GDSs -- Amadeus, Sabre, and Travelport -- all say they are willing to work with airlines to develop NDC-style solutions and to address their merchandising concerns.
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