Travel managers across Europe are objecting to Lufthansa corporate contracts that would cut the rebates of companies that fail to meet deal targets,
EuroBTN learned this week. This follows
EuroBTN's story two weeks ago that some German travel managers are refusing to sign the contracts because they oblige clients to authorize the release of potentially sensitive transaction data
(EuroBTN, May 5).
Now it has emerged that the contracts, which started to be introduced in recent months, are not only affecting customers based in Germany. At last week's annual conference for the Guild of Travel Management Companies in Hong Kong, a travel management company executive said Star Alliance carriers have issued requirements in Belgium for the submission of data for marketing information data tapes. Belgium's national carrier, Brussels Airlines, is a Star Alliance member and a subsidiary of Lufthansa. The global travel manager who revealed to
EuroBTN that Lufthansa is refusing to pay rebates for missed targets is also based outside Germany.
The travel manager, who requested anonymity, said he is resistant to Lufthansa's stance because the airline often blocks access to his company's negotiated fares. "The problem is that Lufthansa does not allow us to book our negotiated fares on every flight as its yield-management system opens and closes booking class designators to control the revenue of each plane," he said. "If we had the equivalent of last-room availability, then removing our rebate for failing to meet our targets would be reasonable, but the new contracts could penalize us even if it is the airline's fault for not making the fares available."
Hans-Ingo Biehl, chief executive of the German travel managers' association VDR, confirmed the same new contractual obligations are alarming his members. "Companies which don't reach their targets will have to pay back their rebates or receive reduced ones," he said. "Our members are unhappy because if Lufthansa's corporate fares were always available, this would be fine, but it cannot guarantee availability. We will see how Lufthansa will react when corporate clients do not sign their contracts."
VDR is urging its members to check their new Lufthansa agreements carefully. "It is very important that as a corporate you know what you are contracting, but not everyone looks deeply into it," he said. "We think big customers won't have a problem because they have the power to tell Lufthansa to give them a good deal, but the small and medium companies don't have that power."
A spokesperson for Lufthansa said the airline was too busy to comment because it was preparing for senior executives to take receipt of its first Airbus A380 today.