BBT Editor’s Lunch: Lufthansa debates climate change and air fares

BBT readers dined at the Royal Automobile Club last month for an Editor’s Lunch, sponsored by Lufthansa. On the menu: climate change, air fares and modern travel programmes

Guests noted the Editor’s Lunch was coincidentally held during the Extinction Rebellion climate change protests in central London; some walked past crowds that held up “No fly” banners.

Like the protesters, our travel managers were seeking answers, too; looking for solutions to make their own travel programmes more sustainable, while distribution technology – including NDC – was also debated.

For the first time, the lunch format included a guest speaker, with Robert Stevens, director of partnerships at ClimateCare, sharing his perspective on travel.

ClimateCare works with companies and governments to battle climate change by financing low carbon projects, protecting natural environments and helping organisations to reduce their own footprint.

“All of you have a carbon footprint,” Stevens said. “No company can have zero. Business travel is one of the most difficult to reduce because it involves flying, but it’s also business critical. It’s easier to buy renewable energy for your offices and reduce the footprint with ground travel. As such, it’s an element we work with corporate clients on the most.”

He asked how many people around the table received carbon reporting from their TMCs, with just a few raising their hands. When he asked if anyone had a green travel policy in place, one travel manager in the construction sector replied they had just been asked to create one, which had been prompted by the company’s environmental team. “But we don’t know where to start, so we’re talking to our TMC,” she said.

Another manager commented: “The challenge I have from a distribution perspective is that certain aircraft are greener. There is nowhere that is displayed, or can be displayed, from a cost or choice perspective.”

Andreas Koester, Lufthansa sales director for the UK, Ireland and Iceland, highlighted the airline’s recent launch of Compensaid – which is a B2C platform that takes into account carbon emissions emitted by aircraft, factoring in engine type, aircraft type and distance of journey.

The challenge I have from a distribution perspective is that certain aircraft are greener. There is nowhere that is displayed, or can be displayed, from a cost or choice perspective

“Passengers can pay to offset by paying for sustainable aviation fuel, which is 80 per cent less CO2 than normal fuel, to be used on a plane within the next six months, or a reforestation project in Nicaragua,” he said.

After one buyer asked if the airline could simply increase its air fares to carbon offset “without anyone noticing”, Koester said Lufthansa was about to announce a new initiative: “If you have a European corporate fare, as of next year we will offer a fare where CO2 emissions are offset, for all of your travels. And we’re not increasing the fare.

“There’s obviously flight shaming by the Greta movement… we’re taking responsibility. We have our own programmes, like Compensaid, which any traveller can do, but if you have a corporate travel agreement in Europe, your carbon footprint will be offset.”

On point
The conversation also veered into the use of loyalty points. One travel manager at a US software company said her firm had built up so many PartnerPlus Benefit points, they struggled to redeem them. “Can we apply the points to offsetting?” she quizzed, with Marco Willa, Lufthansa’s general manager, sales UK, Ireland and Iceland, replying that ClimateCare was, in fact, a partner in the programme, where points could be redeemed towards projects. For now there was no way to automatically use them against Lufthansa’s own offsetting scheme, but it was noted as an interesting possibility.

Another manager said: “We need to consider policy. How do we change it so there’s a pricing tolerance, so if Lufthansa is offsetting emissions, it’s better to pay ¤10 more for that flight. That’s a strategy we’ll have to look at, to set our tools.”

Koester replied: “This is a headache we as a full-service airline have been having for years. Not just talking about sustainability; online booking tools don’t look at anything else, they look at price. Coming back to distribution, the GDS cannot display any differences either… what we are doing in the area of NDC and distribution, this has a certain connection to sustainability and CO2.”

Health check
With business class deemed less environmentally friendly than economy, one pharmaceutical sector travel manager commented: “We’re all business class, but I’d love to say to our employees: you’re only going to New York; you could go economy. But then I’d get HR asking about their ‘wellbeing’.”

Another manager said: “HR wants everyone to feel comfortable on the plane, so we’re now leaning to premium economy on some of the longer haul flights, versus business.”

A travel manager from the insurance sector agreed, saying he had seen “an increase in travellers shifting towards premium economy because of climate concerns”.

While it was agreed that the industry must collaborate more, one manager said they felt “the airlines have to do something”.

Koester explained that Lufthansa was modernising its fleet, with new aircraft producing 20 per cent less emissions. It was also investing in sustainable fuels. “In three to four years, all fares will allow carbon offsetting,” he said.

NDC progress report
Lufthansa also updated the diners on NDC, after one buyer jokingly asked: “Is it real?”

Willa replied: “From a UK perspective, we have 150 travel agencies connected. What is NDC content? It’s cheaper fares, attractive prices… We have corporates, TMCs, leisure agencies connected to our NDC inventory – it is real.”

One attendee said he believed “airlines have disrupted the market. The TMCs and GDSs have had their own way for far too long. Our procurement directors cannot believe we buy travel through an agency or GDS. There’s no other commodity where there are so many people in the chain.”

Several managers brought up how the online booking tool had a role to play in displaying the right content – as this is the point of booking for most travellers. One observed: “The airlines need to work more with the OBTs to visualise this.”

Another agreed: “Most of us here have high online adoption. The OBT is the interface – we need to get that right.”

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