Lufthansa Yanks Deals For Corporates Opting Out Of MIDT

Lufthansa has started pulling corporate net fares from German clients who refuse to allow their data to be submitted to marketing information data tapes sold by global distribution systems to airlines for route spend analysis.

A concerned corporate client contacted EuroBTN this week to say its negotiated fares had been removed, and German travel management association VDR and a major TMC confirmed it has happened to several other German companies that refused to cooperate. "Travel managers don't like the clauses which are being put into their contracts that they must give data through their TMC," said Hans-Ingo Biehl, chief executive of VDR. "If they don't like it, they have to agree not to take the corporate discount. Lufthansa knows they are concerned."

Lufthansa introduced the new clause to corporate contracts in recent months in response to the revised European Union CRS Code of Conduct, published in March 2009. The revised code stipulated that GDSs could only include data from TMCs and their clients if specifically authorized to do so.

There is some disagreement over the extent to which Lufthansa can identify spending by specific clients through MIDT. The customer who contacted EuroBTN under the condition of anonymity said he has happily supplied airlines with data in the past through the third-party data consolidator Prism. "Prism data never worried me but this puts a lot of power into the airline's hands that would not be the case in a normal negotiating situation," he said. "It includes our traffic with significant competitors."

However, a senior German TMC source, also speaking anonymously, said there is little to worry about. "A minority of our clients are worried and a couple would rather have no net fares anymore than provide data to Lufthansa. I am questioning why," he said. The TMC executive added that data is being passed to the GDSs using virtual city codes that pool data from numerous locations, including those from agency client implants with unique International Air Transport Association agency numbers. "There is no chance of identifying the client," he said.

Biehl is less confident. "I don't know if in all cases you cannot go back through the IATA number to the client data," he said. Biehl also spoke out against Lufthansa for going against the spirit of the code of conduct by pressuring clients to authorize the release of their information.

The TMC source added: "Lufthansa wants to play with its strong position in the market. This doesn't surprise me."