Online travel site Travelocity.com (Nasdaq: TVLY) announced Monday that it has entered into agreements with Lufthansa and British Airways (NYSE: BAB) to become the first global online travel partner for both airlines.
As part of the agreement, Travelocity will offer special fares from British Airways and Lufthansa, and will kick off integrated marketing programs that include joint promotions, marketing, advertising and e-mail campaigns.
Given that both British Airways and Lufthansa are backers of the European airline-owned travel site Opodo.com, these deals with Travelocity are especially significant.
Forrester Research senior analyst Henry Harteveldt told the E-Commerce Times that the deals do not show a lack of faith in Opodo, jointly owned by nine major European airlines, but rather that leading airlines like British Airways and Lufthansa realize that there is no single solution to online ticket sales.
“Leveraging Travelocity’s strong brand in the U.S. and superior customer service, these airlines will be able to reach a whole new populace of customers,” said Harteveldt. “Airline companies are realizing that they cannot be isolationists and must put their product on numerous Internet shelves.”
Combined Brand Strength
Harteveldt added that Travelocity affords these airlines access to a broader suite of products and services to sell, such as car rentals, vacation packages and hotel reservations.
“These deals will allow British Airways and Lufthansa to round out their product offerings,” said Harteveldt. “The reason these are win-win deals is that all three corporations will now be able to sell more robust product based on the collective strength of their brands.”
Travelocity.com president and chief executive officer Terry Jones echoed Harteveldt’s assessment.
“This extensive, integrated agreement is a perfect example of how the Internet is being used globally not only to sell products, but also to extend brands and better position outstanding travel suppliers like Lufthansa in the marketplace,” said Jones.
Travelocity director of partner marketing Bill Miller told the E-Commerce Times that the deals have everything to do with ticket sales, and not much to do with site traffic.
“Just consider that 80 to 90 percent of online travel consumers are still not purchasing,” Miller said. “There’s tremendous growth potential.”
Forrester’s Harteveldt is similarly optimistic about the prognosis of the online travel industry, dubbing it the single strongest industry on the Internet.
The agreements with Lufthansa and British Airways include Travelocity’s German, Canadian, U.S. and U.K. sites.
Lufthansa’s company logo could be spotted on Travelocity’s site as early as July 12th, promoting special fares to Europe.
“As an international carrier, we chose to work with Travelocity because of its strong understanding of the global market,” said Thomas Winkelman, Lufthansa Vice President, the Americas.
British Airways has worked with Travelocity’s U.S.-based site for nearly two years and with the Canadian site for one year.