GBTA Europe conference
More than 950 delegates headed to Frankfurt for the annual GBTA Europe conference, held in partnership with the German business travel association VDR. Paul Revel reports
He added: “I’m sure there will be consolidation – the next downturn is around the corner, and we all know how volatile the airline industry is.” He said that Lufthansa “definitely needs to be an active participant” in consolidation, which is why the group
Carsten Spohr
ONE OF THE KEYNOTE SPEAKERS at the GBTA conference 2015 was Lufthansa CEO Carsten Spohr, who apologised to travel buyers for deficiencies in the airline’s direct booking portals – but defended the decision to introduce the Ð16 global distribution system booking fee. “I need to apologise to you, because we are not in perfect shape yet, in providing you with the interfaces you’re asking for,” he said. “We need to improve the technology. We should have done it better – and that’s what we are working on now.” He said a distribution fee had always been charged, but was paid for by every customer: “Now it’s paid only by customers that actually use the channel. It’s more transparent and fair to allocate the cost to those who use it.” Spohr insisted new distribution models are the future of the industry. “Airlines, like any other consumer- orientated company, want direct contact with customers. We want to gather the data about our customers – we see
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this as big value for us.” He said he has no doubt other airlines will follow Lufthansa’s move, and pointed to an 83 per cent load factor across the group as proof that the distribution cost charge (DCC) had not harmed revenues.
CONSOLIDATION The airline boss also predicted inevitable and essential consolidation in the sector. As one of the world’s largest carriers, “it is a joke” that Lufthansa Group only commands 3 per cent of global market share, said Spohr.
Consolidation is particularly essential in Europe. “It’s obvious from the numbers,” he said. While the top five airlines in the US enjoy 92 per cent of market share, in Europe the top five – Air France-KLM, IAG, Lufthansa Group, Easyjet and Ryanair – have just 45 per cent share. “Be it lobbying the EU or synergies, we’re just too small, all of us,” he said.
need to quickly drop the ball and pick up something else.” Alan Rich, CEO of expenses
Sixt hosted the GBTA’s spectacular gala dinner at Kurhaus Wiesbaden
is focused on positioning Eurowings in the low-cost carrier (LCC) market – a sector he said is over-populated with an unsustainable nine major LCC airlines in Europe.
‘TRIAL AND ERROR’ Airplus chairman Patrick Diemer said travel companies should accept “trial and error” when investing in technology. Speaking on a CEO panel session, he cited Airplus’s current pilot trial of a restaurant payment tool.
The mobile app allows the user to order from a restaurant menu, and then pay the bill, without any cash, cards or receipts changing hands. The payment is then automatically entered into a digital expense management process. “I have no idea if this is going to work or not,” said Diemer. “If not, we
software firm Chrome River, said there would be more investment in application programme interfaces (APIs) to enable low-cost communication and data flow in the supply chain. He also predicted more electronic validation of expense receipts – as employers place less value on printed receipts that can be altered in image editing software such as Photoshop – and an increase in formal pre-trip approvals. Airplus’s Diemer added that he was “optimistic” about the rise of sharing economy providers, comparing them to low-cost airlines who were previously purely consumer- facing but have now “opened up to the corporate world”. But he said providers will need to comply with rules if they want to engage with corporate managed travel programmes. Chrome River’s Rich advised buyers to “negotiate upfront in your supplier agreements” over availability and delivery of data. He also said a current challenge is the shortage of business analysts to look at the vast quantity of data available. “The information is useless if no one has time to sift through it”, he said, adding that “machine learning” plays a key part of getting meaningful information from data. Interview with GBTA Europe president Gehan Colliander, p38
BBT JANUARY/FEBRUARY 2016 21
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