T2RL - Amadeus' Response on the effect of Lufthansa's Distribution Strategy

Amadeus' Response on the effect of Lufthansa's Distribution Strategy

Amadeus responded to Lufthansa's announcement to introduce a surcharge of 16 Euros per ticket for tickets booked using a global distribution system. The response suggests there would be no financial impact. This suggests any decreases in volume will be compensated by an increase in the charges. It also implies that the ratio of Amadeus' bookings per ticket is high at about 2.7. T2RL believe this indicates that on average Lufthansa is selling complex connecting itineraries through the GDS rather than simple point to point itineraries. It also suggests that the average booking fees have risen by about 2.5-3.0% since 2008 as the surcharge rate at that time was published at 4.90 Euros.

Published: 11/06/2015

Note to Lufthansa announcement

Lufthansa Group announced a new distribution strategy for its airlines. This strategy includes a cost differentiation in various booking channels, with a surcharge of 16€ per ticket (c. 6€ per booking) to those bookings made through Global Distribution Systems provided by Amadeus and others.

In economic terms, Amadeus does not foresee a meaningful impact from this new strategy announced by Lufthansa.

Amadeus believes its business model is strong and it will continue to evolve with the needs of the industry. Its technology, industry expertise and innovation capabilities best position Amadeus as the right player to bring value to all participants in the travel industry and its shareholders.

Madrid, 4 June 2015

Source: http://www.investors.amadeus.com/media/files/english/CNMV/2015/Lufthansa%20English.pdf