The pending end of Lufthansa Group’s participation in the Sabre GDS could be a sign of things to come, according to Phocuswright senior analyst Norm Rose. 

“I see a major trend toward NDC adoption and to some level of GDS bypass,” Rose said, referring to IATA’s New Distribution Capability. 

Lufthansa Group emailed a letter to travel agencies last week, telling them that Sabre had terminated the distribution agreement with Lufthansa, Austrian, Swiss and Brussels, effective June 30. The termination also applies to Sabre-owned Abacus, a GDS leader in the Asia-Pacific market.

Lufthansa Group said talks with Sabre continue. 

“The Lufthansa Group is open to constructive, solution-oriented discussions and is engaged in amicable talks with Sabre in the interest of Sabre and Abacus users,” the letter reads. 

Sabre, too, said that talks continue.

“We remain committed to reaching an agreement with Lufthansa that fairly balances the needs of all members of the travel ecosystem including consumers, Lufthansa Group, travel agencies and Sabre,” the company said. 

If a deal isn’t reached, it would mark a new low in a relationship that has been combative since 2015, when Lufthansa became the first airline group to assess a GDS surcharge. The surcharge spawned a 2016 lawsuit by Lufthansa against Sabre as well as a Sabre countersuit. 

Rose said it’s possible that Sabre and Lufthansa could yet reach a deal. “But I think Lufthansa has a much bigger vision here,” he said. 

In its letter to agents, Lufthansa said that it continues “to work on making the distribution of flight tickets more innovative, attractive and more customer-oriented, for you and our joint customers.”

When it implemented the GDS surcharge in 2015, Lufthansa heralded its desire to be an airline industry leader in transforming distribution by moving more sales into direct, NDC-enabled channels. 

Rose said that previous crises in the travel industry have led to major transformations. Sept. 11 helped pave the way for OTA growth. The 2008-09 financial crisis was a catalyst for the emergence of Airbnb, he said. Now with sales volumes way down, the time is ripe for a new disruption. NDC could be primed. 

He noted that the technology, which enables airlines to sell personalized content through intermediaries, had already gained traction ahead of the Covid-19 pandemic. That traction has included numerous NDC efforts by airlines and the emergence of NDC aggregators such as TP Connects and Duffel. GDS companies Sabre, Travelport and Amadeus are also developing NDC capabilities. 
___

Jamie Biesiada contributed to this report.

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