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Application for approval of an agreement (Resolutio n 787) by the n 787) by the International Air Transport Association (IATA), fil ed on 11 March 2013 ed on 11 March 2013

“To Whom It May Concern”

Dear Sirs

We are writing you with respect to the application for approval of an agreement (Resolution 787) by the International Air Transport Association (IATA), filed on 11

March 2013.

The first point of NDC and Resolution 787 that I wo uld like to draw your

attention to is innovation . Resolution 787 is focused solely on enabling the airline industry to jointly modernize a data transmission s tandard. That in turn will enable airlines to present a richer product offering to co nsumers through indirect channels, i.e. the travel agencies. The industry calls this n ew capability “New Distribution Capability” or NDC. Today, airlines are unable to deliver their full pr oduct offerings to consumers through the indirect channels because the existing distribu tion network is based on technology that was developed prior to the Internet . This in turn undermines travel agents’ ability to meet the needs of their customer s, who, in fact receive dynamic and comprehensive offers on the airline websites today. NDC will allow airlines to make the same dynamic and comprehensive offers through t ravel agencies – online and

offline.

Second I would like to highlight the clearly positi ve effect of NDC on competition . If adopted widely, NDC will result in airlines ha ving to compete directly with one another on service offerings as well as pr ice (and not just price, as in today’s indirect distribution environment). Consume rs will be able to pick elements they want out of an airline offer through a menu of options, which can then be compared to similar offers by other airlines.2

In fact, NDC will lead to stronger competition, bot h in the airline industry, as well as among IT service providers by lowering market entry barriers, thus giving the travel trade more opportunities in the way they sell airli ne products to consumers.

Further, Resolution 787 does not oblige airlines to make dynamic offers to

consumers . Airlines may well decide to continue working in t he current distribution model. Resolution 787 is to develop an industry mes saging standard that enables airlines to make dynamic offers in the indirect cha nnels. At the same time it enables travel agents and IT service providers to process d ynamic offers through one single XML interface scheme, i.e. only one XML schema for all airlines, other than every airline developing its own proprietary interface. C learly, Resolution 787 does not oblige airlines to make dynamic offers, it states t hat all airlines that whish to make dynamic offers to consumers through travel agencies will use the same XML interface standard in order to make industry adopti on more efficient.

One last item that needs some reckoning is data pri vacy . Resolution 787 and the

NDC that it enables do not violate airline customer s’ privacy rights. Customers will not be required to provide any more information abo ut them than is required in the current shopping process.

Let me summarize the value proposition for the indu stry:

Consumers : Approval of Resolution 787 will facilitate indust ry efforts to provide consumers with the ability to receive, build, compa re and purchase fully personalized offers via all channels seamlessly.

Airlines : Approval of Resolution 787 will give airlines the option to present their offers in a manner in which they want them presente d to customers via indirect channels. It will also result in improved time to m arket with new products and services while leading to lower distribution costs.

Travel agents : Approval of Resolution 787 will enable airlines t o provide travel agents more content and a greater ability to create value for their customers.

Technology providers : Approval of Resolution 787 will enable technology service providers to aggregate and display richer content f rom airlines and remove a major barrier to innovation in the existing distribution model. A global XML based standard will allow technology providers to make the investm ents to support airline distribution and customers with confidence they will be compatib le with the industry.

Lufthansa strongly supports NDC and Resolution 787.

Jörg Hennemann Vice President Revenue Management & Distribution