FlyerTalk Forums - View Single Post - LH Takeover: Your fears for LX Travelclub? - Everybody post please
Old Aug 5, 2005, 1:45 pm
  #16  
LoungeLizzard
 
Join Date: Mar 2005
Location: ZRH, Switzerland
Programs: M&M, Fan of MO, Shangri-La.
Posts: 686
Travelclub has managed again and again to attract and keep my business in the past 15 years. If I remember correctly, I was a status member for all the time except for about 3 months this spring. (Back to gold now )

What does Travelclub do and M&M falls short:

1. CREATE EXTRA REVENUE
I created extra revenue on otherwise unsold seats, mostly based on good mileage promos. (Money spent this year on purely "unnecessary" flights: ca CHF 9'000 for the family)
I've never heard of a true MR opportunity on LH.
With a good inventory management, this is a win-win situation. I win a nice first class flight and Swiss wins money on otherwise emtpy seats.

2. KEEP ME LOYAL:
- It kept me completely loyal to Swiss while flying within Europe.
- I've never used a low cost carrier so far.

This only works if there's a reasonable amount of miles for any fare. If the miles go out of the equasion, there's no pain in switching to Air Berlin or the like. And yes, Marvin, they do have an attractive FFP as well. (Just from hear-say, too lazy to look it up myself: 1k miles per leg, 15k miles for a free flight. And free is really free, including the taxes.)

3. MAKE ME A HAPPY CUSTOMER:
- Reasonable to good availability of awards coupled with a nice network & product gave me many a nice journey further in the front of the plane than I could otherwise afford. I'm really thankfull to Swiss(air) for this.


Why the current Travelclub strategy is right for Swiss (and M&M isn't)
...follwing in Marvin's footsteps, I know...

On one hand, I can follow the argumentation that an airline wants to catch and keep the full fare C/F customers with the FFP and does not care about the opportunistic "cheap charleys".

On the other hand, there's also the logic that an effective FFP will allow you to attract business in the tough European market and to price yourself above the competition. You may say that you actually attract the high yielding customers largely by offering the right non-stop destinations, schedule and a good product and not with the FFP.

I don't say either one theory is right or wrong. All I say is they both exist and each FFP is a compromise between those two ideas. I would count Travelclub as following rather the second strategy and I'm happy it does.

M&M clearly follows the first strategy and that's a killer for the european network if you don't have much else ahead of the low costs carriers. And here's my point: LH and BA do have a SIZE that currently allows them to outplay the competition. Swiss is much smaller and risks to loose route by route in the war against the low cost carriers.
Therefore, Swiss NEEDS a more attractive FFP to keep it's european network alive. And let's face it: Without a european network, you can forget most long hauls, too!
Then, it's good bye Swiss and good luck connecting in FRA or MUC.

Trailing off a little: Don't be fooled by smart journalists telling you there will be other carriers jumping in. NEVER EVER! The reason why ZRH still has a lot of long hauls is because it still has a network. Without feeding traffic, 90% of these longs hauls are dead.
For those who don't believe: Do a little research and see how many airlines have tried to start a long haul operation out of GVA. Even US carriers all had to realise that it just doesn't work if you haven't got a critical amount of traffic.

Hopes and wishes
Even if the end of Travelclub should come one day, I hope that LH realises that what strategy is right for LH is not necessarily the best for Swiss. By this, I mean that it CAN make sense to attract low yield passengers and to create extra demand purely by means of the FFP.
The good thing is that there are countless ways to achieve this with promos, rules, fare classes used and so on.
LoungeLizzard is offline