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Lufthansa Group to be removed from Sabre as pair fail to reach distribution agreement Lufthansa Group to be removed from Sabre as pair fail to reach distribution agreement

Lufthansa Group airlines will be pulled from the Sabre distribution system from the end of June. The group, which includes Lufthansa, Brussels Airlines and Austrian Airlines, has notified travel agents by email of the termination, which also affects those connected to Abacus, which Sabre bought in 2015.

A statement from Sabre says its team has been “working diligently” with the Lufthansa Group to renew the distribution agreement. “We are committed to advocating the needs of the value chain to create opportunities that drive revenue for both airlines and buyers. "At this point, Sabre and LHG are actively discussing the airline group’s participation in Sabre. We remain committed to reaching an agreement with LHG that fairly balances the needs of all members of the travel ecosystem—consumers, LHG, agencies, and Sabre.” Lufthansa and Sabre have been wrangling over distribution costs since the Germany-based group unveiled its Distribution Cost Charge (DCC) in mid-2015.

Lufthansa introduced the charge on bookings made via GDS while making a portal available to leisure agents and enabling the corporate travel community to purchase tickets via their negotiated rates. Since then the pair have been involved in legal proceedings, with Lufthansa suing Sabre in early 2016 and a counter suit by Sabre later that year.

This latest move will be seen as a boost to NDC aggregators such as Airlines Technology (recently acquired by TWAI) and AirGateway. Jorge Diaz, founder and CEO of AirGateway, believes Lufthansa is sending “a powerful signal to the industry on their commitment with direct distribution and NDC.” He adds that steps made by the Lufthansa Group in the past have been followed by British Airways-parent IAG and Air-France-KLM.

Ian Sinderson, chief executive of travel managment company ATPi, says: “From what we can see sat on the sidelines, this seems to be the end game to a long running set of legal battles over content and it’s pricing through Sabre by Lufthansa.” He adds that it demonstrates the needs for TMCs to have a multi-GDS strategy as well as technology to aggregate and distribute non-GDS, including low-cost fares and NDC-driven content to corporate customers. Sinderson says a deal will likely to be struck between the two companies.

“Sabre is an important distribution channel for many markets, especially throughout the Americas and I doubt Lufthansa really want to close the door on that channel.” The Business Travel Association, which represents TMCs in the UK, urges the two sides to find some common ground.

Clive Wratten, BTA chief executive, says: "Easy and wide-ranging distribution of all elements of business travel content is crucial for the recovery of the industry and corporates it serves. NDC forms an important part of that distribution eco-system, and so do the GDS."

In a statement, Lufthansa Group confirmed cancellation of distribution agreement by Sabre, adding: "We continue to hold open, constructive and solution-oriented talks with Sabre in favor of our joint customers and sales partners. Nevertheless, we will be taking this opportunity to assess options to accelerate modern airline retailing."