The operator of Frankfurt airport, Fraport, said on Friday it expects Lufthansa to grow its long-haul business at the hub despite a row over a foray by budget airlines into the airport. "I expect that long-haul will continue to grow at Frankfurt, and concretely at Lufthansa," Fraport CE Stefan Schulte said. Fraport last year signed up Ryanair for routes from Frankfurt, which has unleashed a row with Lufthansa, Fraport's biggest customer, over incentives for new routes from which Lufthansa says the Irish low-cost carrier is benefiting disproportionately. Lufthansa has threatened it could route more transfer flights through Munich or Vienna instead of Frankfurt. Fraport CEO Schulte said talks with Lufthansa over airport fees in Frankfurt were constructive and would continue into April. "We have a very intensive, deep, broad business relationship with Lufthansa. In such a relationship there are always some days that are more difficult," he said.<br/>
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The airline industry has been watching Lufthansa’s performance since summer 2015, when it launched a major investment and commercial effort in direct-booking connections with the corporations and travel agencies that buy high volumes of its tickets. International Airlines Group, parent company of BA and Iberia, may make a similar move this year, according to interviews on a background basis that Skift did with industry executives and investment analysts. If it does, BA will benefit from the work the German flagship carrier has done. By pushing direct connections to travel agencies that don’t book direct, Lufthansa has prompted many travel management companies (TMCs), other travel companies, and aggregators to develop the “middleware,” or technical plumbing and data feeds, needed. Now that those connections are becoming available, they could be used by other airlines, too. And Lufthansa also did the hard work, risking the ire of travel agents, by imposing a surcharge on bookings that weren’t direct. Some industry observers thought Lufthansa would lose millions of dollars and significant market share after it added an E16 fee on bookings that go through the large booking software companies — Amadeus, Travelport, Sabre, and Travelsky — used by tens of thousands of travel agencies worldwide. Lufthansa says the impact of the surcharge has been negligible. In the past year and a half, Lufthansa has signed up more than 100 travel companies, aggregators, and technology providers to its alternative, direct channel. That’s the most extensive effort at direct connections of any carrier since American Airlines tried — and failed because of resistance — to install direct-connect technology with agency customers half-a-dozen years ago. Airlines have balked at copying Lufthansa’s move until they see how well it does. Lufthansa is now saying that it is having “success.” Story has more detail.<br/>
In a bid to spur more duty free sales last year, United created a program that allowed non-travelling customers to surprise family or friends on international flights by sending them gifts delivered by a flight attendant. United recommended consumers use the service to say, “congratulations,” “happy birthday,” or “I love you,” and promised to deliver gifts in a special bag with a personalized card. It was an intriguing idea but it was not enough to save the airline’s duty free program. United, which has been working with a company called Duty Free World, said this week it will stop boarding duty free items on March 31. It will be the last of the three major US airline to close its shop, following Delta, which folded its operation in 2014, and American Airlines, which shut its down in 2015. Other North American airlines, including Hawaiian Air and Air Canada, continue to sell duty free items. Duty free still serves a purpose, mainly for airlines that invest heavily in promoting and marketing the service. Korean Air has a duty free shop in the rear of its Airbus A380 economy class section that’s so big it kept the airline from installing as many seats on the aircraft as normal. And Qatar Airways, which also takes duty free seriously, earned more than a half of billion dollars in revenue from its duty free program in 2015. Still, many airlines report sales have slowed as airports have invested billions of dollars into improving the retail experience. “We made this decision based on declining sales revenue for both United and Duty Free World,” United said in a message to employees. “We are unable to compete with airport duty-free vendors that stock much more merchandise.”<br/>