TRAVELSIG

Interesting point of view.

In other words- LH would like the "unicorn" customer. As with the pot of gold, the leprechaun at the end of the rainbow, the winning of the lottery- it is simply unrealistic.

I was out for dinner last night with a very frequent traveller who has a few hundred regular travelling employees- he was super annoyed as a HON that another passenger got upgraded HKG/FRA from C to F ahead of him because they had a higher fare class even though they were FTL.

IF LH group wants to award only on higher revenue customers as measured transactionally- they really should just cancel the Frequent Flyer program right now altogether and set something that awards on marginality.

Rarely do we disagree- however your analysis that HON circle customers are low yield and not attractive differs significantly from mine- it could be that you are correct- however it is completely different information than the CFO of Lufthansa gave me at a dinner last year in Hamburg.

Cheers

gum

He is indeed a really great customer. Always paying relatively high mid-week fares in Economy Class which (as no free middle seat is part of the Eco product) can be filled up with 3-3 compared to the Business Class with 2-2.

And the same humble seat pitch. As these higher fare classes of Economy Class (Y,B,M,K) are often not dicounted 33% against the C,D fares he delivers more margin for every flight!

In terms of profit contribution the flexible HON Eco traveller in SH/MH is delivering the highest possible profit margin.



So *my assumption* is that they have bought some "great" advice at a consulting firm knowing really nothing about air travel. Can assume some great names.

They will take their classic instrument box of cost-cutting and staff-axing from customer to customer. And one of the measures which are the easiest ones to implement is: Cost reduction.

So they get huge paybacks by the customer (the airline buying their "services"). Maybe based on "reached" cost reductions, maybe based on some other criteria. Naturally the annoying of customers and the migration of them is not measured by any statistics they deliver.

First step before "consulting" a target company is to slash nearly all of the regional sales/customer service representatives and installing a dedicated service provider. He will overflood the management with senseless statistics, complaints. And naturally their surveys are using terms and questions not reflecting the reality. So the first step is: Build an artificial wall between the customer and the company. Called the "Verl wall".

And in the long run they can destroy the reputation of the inner core and values of ANY of their consulted companies.

But no harm to the cost cutters and "consulters": The next step of advice is waiting for the use on hundreds of customers.

Then called: Business rebuilding, Hire an architect for remodelling the company.

Waiting in the "refrigerator" for use since 2009, e.g. here: :-:

http://www.mckinseyquarterly.com/Reb...putations_2367

But don´t forget the intermediate step in order to enable your staff to operate all the issues: Control the mess/control the crazy.

NA-Flyer

It is NO problem to pay higher fare buckets. But first let LH have a better C class seat then we will stop whining about their unjust fares.

I strongly believe that LH C class seat does not worth more than what many flyers grabbed it last year at the special sale of euro 1,111.

LH current C class seat is amongst the worst in the industry comparing it to CX or SQ or BA or even their sister company LX and if you notice all flyers they try to grab a C ticket at a discounted price and the aim is to upgrade it to First

MichalFKowalik

can't agree more but does HE know about it?

mfk

oliver2002

I'm pretty certain there are 2000 or so customers like the one described above among the 16 million who fly LH Group each year and that is what they are looking for.

Of course the V fare HON sebfra describes is profitable too, but they want to award HON to the ultra prfitable leprechaun. Life goes on...

alfahund

That's me But it seems they don't love me anymore, because my travel policy says Y only for EMEA and that will not change... but because of that policy I often get the most expensive Y class fares due to my last minute trips. And also that will not change.

gum

Sorry to hear this.

Two ways to make this travel pattern more bearable:
1.) I think Oliver2002 has opened a great threat with the topic of the New OS Upselling policy in selling upgrades from 149 Euro for European travel. So in case of extremely fully booked flights this would be an option for some flights.
2.) Just add up your last years revenue stream and start letters directly to members of LH's board of directors. Both as an eye opener and enabling them to have a look into the reality of air travel. Be sure to send a letter directly to the Corporate HQ and jump over the Customer annoyance ah service centre.

Maybe this helps the management to have a clearer view on their business decisions. Would really appreciate if they extend the HON membership using the old qualification rules.

oliver2002

HQ just sends them over to customer relations... many many many try to outsmart the regular channels and send a letter to the CEO each day

ProfNapalm

Why whine? Just don't use them

I believe that the old C is not even worth the $1,500 they sold it for.. but unfortunately a lot of people are willing to pay a lot more.. so it will take
a) a lot of customer decrease to get C fares that are worth it and
b) a long time to complete the rollout of the new C as enough people fly the old one still..

Any bets on A) not happening ?

ProfNapalm

Ummm.. you really call sending a letter to LHs CEO "outsmarting" ? I would rather call that.. brillant selfown ?

gum

But you can be sure that at "the receiving end" of this transmission there is a real human being assisting/working for one of the managers of the Board.

Some years ago I tried this with Hartmut Mehdorn´s Deutsche Bahn and got a response by a human far exceeding the usual blablabla E-Mails.

So for alfahund it would be a time good invested.

And in the case of his travel pattern it would be really worth to contact this "human-being assistant to the manager" next year or whenever his status ends for a "status match".

Besides that I have no idea for a wake-up call from Alfahund to LHs management.

alfahund

1. I find 149 Euro for OS far too much! Not worth it. That would be 149 x 100 flights out my own pocket? Why would I do that?
2. I sent them several letters, they know. But they don't care.

And BTW, LX is still holding up the good old HON Circle... last 4 flights - 4 upgrades (last week), always a call from customer care when something goes wrong plus sensible compensation without any argument... a pity that they will not be able to keep it up if the cost savings saga continues...

stefanot

Probably they are 2000 customers like that, but how many of them would fly 600.000 miles in 2 years exclusively with LH?

Anyway, I think you pointed to something very interesting: when I first time became a HON, many, many years ago, I was surprised to receive invitations to shows where very high priced luxury products where sold. I love luxury products, and have fun to buy sometimes toys, but why did LH think I would need them to get into that field? You really don't need to be a HON to buy a Ferrari!

One thing is living the fun of luxury and an other thing is to suffer while walking in FRA from terminal C to A to catch the connection flight. As HON I always hoped to get help in the second part and I would not care after a bad intercontinental night-flight to be escorted in this case also in a SMART.

But beside my provocative statement, the question is really open: should the HON status "in primes":
a) satisfy the practical needs of the FT
b) protect the VIP-image which for sure many people have

Could it be that LH pointed to b) and has now problems to deal with a)???

seat 1a

Agreed , and I would guess that was a typical HON of the 2000 or so when hon was implemented. I can not believe it is so difficult to understand that these are the HONs LH want to reward and nurse , not the 6000 or so cheapo HONs .
Makes sense to me

Hippo72

I guess you can take that for granted. LH does not want a)