Originally Posted by Furnle

Hello to all,

sorry for the late reply, but I wasn't able to share my opinion with you all before.

Concerning the Lufthansa Dialogue, I want to add just some points. Feel free to contest:

LH is charging more for the tickets (average speaking); also, they want immediate revenue instead of future one. This means that they currently believe that Loyalty does not pay for them;

Most of the costs come from fuel, airport taxes and wages. They can control the last one, but not the other two;

LH wants to be the first "5 star airline" in Europe. Beside some marketing effect, to me, that means nothing, specially because it is very easy to achieve that status with Skytrax, if you know what I mean;

At the same time, LH does not need anymore to be nš1 in Europe. That should bring some worries to the shareholders, because when an airline starts to shrink, you will never know when it will stop. One thing is to change some markets (going to the ones which bring more profits or which have more growth perspectives); another is to retreat, sending planes to scrap earlier than was planned, and cutting routes. Each route you cut is less feed to another route. And that is a snowball. You have less costs, but there is a point when the lost revenue is much bigger than the savings achieved. As a strategic move, this is quite dangerous, and much more significant than the changes made in Miles and More program;

Talking about strategy, that seems to be Achilles' heel of LH right now. My impression was: they have goals, they have some means to get there, but those goals and means do not compose a strategy. That's the reason why I asked about strategy and, honestly, I didn't get a proper answer from Mr. Spohr. Maybe because they are making SCORE as their strategy. Unfortunately, when I look at LH right now, it resembles more and more Air France. They are not leading: they are running after, they are chasing, but they don't even now exactly what they are chasing;

They assume they broke the loyal relationship LH had with their best costumers;

They are not so sure if they will be able to achieve their goals. To the ones that were there, you could notice that in their corporal language, in some expressions, and, after the dialogue, at least two of them considered that some measures would need to be reverted in the future. They wanted to show confidence, but, honestly, they are afraid of the path LH is taking. At least, they are insecure.