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Virgin Atlantic: Agents still key to our success
Amie Keeley
amie.keeley@
travelweekly.co.uk
Travel agents are “critical” to Virgin Atlantic’s success and there are no plans for the carrier to become direct-sell- only, its chief executive has said.
Craig Kreeger put to rest any
fears the airline would follow in the footsteps of sister company, Virgin Holidays, which last month announced it would become direct-sell after 30 years of selling through the trade. Speaking at the latest Travel
Weekly Business Breakfast, Kreeger stressed that the long- haul specialist was a “separate” business from the airline with a very different level of trade sales. “Most Virgin Atlantic revenue and bookings come from agents,” he said. “We recognise that our airline business is not just reliant upon, but totally dependent upon, us having great relationships and solving problems for travel agency partners.
“Nothing in Virgin Holidays’
strategy affects the reality that Virgin Atlantic considers our primary distribution channel to be the travel agent.”
When Virgin
Holidays announced it would be cutting out the trade, it said it could no longer
Craig Kreeger 6
travelweekly.co.uk 5 November 2015
add the value and the consistency of service it wanted if it didn’t “own the customer”. Kreeger said he had received emails from concerned agents asking what the implications were for Virgin Atlantic. “The answer is nothing,” he said. “We rely upon and think the
travel agency community is critical to our success.” He added: “For Virgin Holidays,
the level of trade sales as a percentage of its revenue had dropped precipitously over the past few years. It had become quite a small channel and they decided the right thing to do was to become a direct business.” Virgin Cruises, which is due to start operations in 2020, has said it still plans to work with agents globally. A spokesman said the trade would be “an important partner for our business” and that the business had recently sought the opinion of US agents about its brand.
Lufthansa sales fall 25% through Advantage Focus
Ian Taylor
ian.taylor@travelweekly.co.uk
Advantage Focus Partnership members have recorded a 25% drop in Lufthansa bookings in the two months since the airline imposed a €16 (£11.30) GDS booking fee.
Ken McLeod, Advantage
corporate director, confirmed the year-on-year fall in bookings and told Travel Weekly: “That is high-yield, long-haul business. It’s quite a lot of business to lose.” Lufthansa brought in the Distribution Cost Charge (DCC) on September 1 and instructed agents to avoid it by booking direct, after complaining that GDS charges on carriers are too high. The carrier reported “some headwind” in markets outside Germany last week, but gave no details. McLeod said the 25% drop had
come “in a market that is flat” and added: “How long can Lufthansa sustain [such] a dip? The challenge will be getting the business back.” But he said: “The message [from Lufthansa] has not changed.”
“How long can Lufthansa sustain [such] a dip?”
Travelport president and
chief executive Gordon Wilson said: “We’ve seen a big drop in Lufthansa bookings, [although] only 4% of business we do with the airline is in Germany. “Lufthansa seems to be pricing
aggressively.” But he added: “This demonstrates the real value of GDSs and travel agencies. Lufthansa has maybe done us a service.” Bob Schumacher, UK managing
director of Lufthansa’s US partner, United Airlines, described the fee as a “decision made for Lufthansa alone” and insisted this week: “We have no intention of doing the same thing.” GTMC chief executive Paul Wait
told delegates at the association’s autumn conference in London on Tuesday: “Some suppliers think third-party distribution is a cost instead of an asset. [But] customers want channel parity.”
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