Plans to restart LH destinations? [and other new routes speculations]

Old Sep 12, 12, 9:37 am
  #16  
 
Join Date: Mar 2006
Location: STR and the rest of EMEA
Programs: LH HON, Marriott Platinum, ...
Posts: 731
Originally Posted by LufthansaFlyer View Post
With BTS being 30-45 minutes from VIE, that is extremely unlikely, though I would love to see it myself!
With the new terminal in VIE, it would be much nicer to get directly to BTS from MUC as we used to
alfahund is offline  
Old Sep 12, 12, 9:48 am
  #17  
 
Join Date: Dec 2007
Location: ORD
Programs: BA, AA, SQ, UA, LH, MR TIT, IHG GLD
Posts: 8,048
Originally Posted by TRAVELSIG View Post
The other advantage that LH should recall about EK & Co. is that people get tied into their frequent flyer program just like they do with LH
I completely agree @:-) A customer gone to EK or QR is a customer lost forever
NA-Flyer is offline  
Old Sep 12, 12, 6:05 pm
  #18  
 
Join Date: Nov 2006
Location: BTS/VIE
Programs: LH FTL**, HH Diamond
Posts: 2,241
Originally Posted by alfahund View Post
With the new terminal in VIE, it would be much nicer to get directly to BTS from MUC as we used to
Amen to that. Also, nothing beats 7 minutes door-to-door car ride on the way to the airport (from the city centre). Not mentioning the new terminal in BTS
whiskey_sk is offline  
Old Sep 12, 12, 11:15 pm
  #19  
 
Join Date: Nov 2009
Location: PDX
Programs: Don't think it matters...
Posts: 5,092
Originally Posted by oliver2002 View Post
Out of your list YYC and GLA will probably see a resumption in services. PHX & PDX are definite history, HYD was gifted to EK. BTS was a reactionary move like the service to STN.
Even CCU has been gifted to EK / Qatar.. Both are flying this route with very high loads from what I hear..
abhilife2001 is offline  
Old Sep 13, 12, 1:06 am
  #20  
 
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,333
"...We are Europe’s Airline Powerhouse connecting Europe
with the world and the world via Europe with our global services..."

--LH Annual Report 2011, 15. Mar 2012 (p.37)
N1003U is offline  
Old Sep 13, 12, 2:01 am
  #21  
 
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,333
Originally Posted by TRAVELSIG View Post
The problem with the bean counters excel test often is they fail to consider that the fixed costs do not have anywhere else to be allocated to. A famous case of a company that kept cutting business lines as they were not profitable and customers as they were not profitable- only each time to learn that the remaining customers and the remaining business units were each time not profitable with the attached incremental expense allocation increases.

But then again, an airline would never think that way- would they now?
Very well said.

It would not be the first time that well-meaning managers have strategically cut "low margin" of "unprofitable" products from their offerings, only to learn the hard way that they have actually cut their own throats...
N1003U is offline  
Old Sep 13, 12, 3:36 am
  #22  
gum
 
Join Date: Sep 2004
Location: Southern Bavaria, Germany
Programs: LH Blue, BA Blue, Hyatt Gold
Posts: 1,517
Originally Posted by N1003U View Post
Very well said.

It would not be the first time that well-meaning managers have strategically cut "low margin" of "unprofitable" products from their offerings, only to learn the hard way that they have actually cut their own throats...
+1 ^
gum is offline  
Old Sep 13, 12, 4:16 am
  #23  
 
Join Date: Oct 2009
Posts: 503
Originally Posted by N1003U View Post
Very well said.

It would not be the first time that well-meaning managers have strategically cut "low margin" of "unprofitable" products from their offerings, only to learn the hard way that they have actually cut their own throats...
I really disagree here. LH management does not get a lot of credit from me these days, but I don't think they are complete idiots. If they make decision to cut service on certain routes, then because these are unprofitable and capacity can be used more profitable somewhere else.

Originally Posted by TRAVELSIG
The problem with the bean counters excel test often is they fail to consider that the fixed costs do not have anywhere else to be allocated to. A famous case of a company that kept cutting business lines as they were not profitable and customers as they were not profitable- only each time to learn that the remaining customers and the remaining business units were each time not profitable with the attached incremental expense allocation increases.
This would only apply if LH decides to leave the aircraft parked instead of reutilizing freed capacity somewhere else. And I don't think that reflects reality
ded0r is offline  
Old Sep 13, 12, 10:21 am
  #24  
 
Join Date: Nov 2006
Location: BTS/VIE
Programs: LH FTL**, HH Diamond
Posts: 2,241
Originally Posted by ded0r View Post
I really disagree here. LH management does not get a lot of credit from me these days, but I don't think they are complete idiots. If they make decision to cut service on certain routes, then because these are unprofitable and capacity can be used more profitable somewhere else.

This would only apply if LH decides to leave the aircraft parked instead of reutilizing freed capacity somewhere else. And I don't think that reflects reality
OK has been cutting routes for quite some time now, not leaving aircraft parked, thinking it can make more money elsewhere, and yet they are far from being profitable today
whiskey_sk is offline  
Old Sep 14, 12, 4:44 am
  #25  
FlyerTalk Evangelist
 
Join Date: Jan 2005
Location: VCE
Posts: 14,161
Originally Posted by ded0r View Post
I really disagree here. LH management does not get a lot of credit from me these days, but I don't think they are complete idiots. If they make decision to cut service on certain routes, then because these are unprofitable and capacity can be used more profitable somewhere else.



This would only apply if LH decides to leave the aircraft parked instead of reutilizing freed capacity somewhere else. And I don't think that reflects reality
I never said anyone was an idiot and the management I have met from Lufthansa are both very intelligent and very capable.

I am suggesting however that strategic and operational decisions are being confused.

To cut a city like Guangzhou is not a strategic decision. The reason LH was not making money in Guangzhou is because their business class product is not competitive at all. Full stop.
TRAVELSIG is offline  
Old Sep 14, 12, 4:45 am
  #26  
FlyerTalk Evangelist
 
Join Date: Jan 2005
Location: VCE
Posts: 14,161
Originally Posted by NA-Flyer View Post
I completely agree @:-) A customer gone to EK or QR is a customer lost forever
Or to CX.

I flew last week on CX because the completely reasonable business class fare to HKG was more than DOUBLE the CX price on LH and CX was non-stop vs. a connection in FRA with LH. I won't write a report comparing CX business to LH.... and at half the price and non-stop... well.. Ciao....
TRAVELSIG is offline  
Old Sep 14, 12, 9:40 am
  #27  
 
Join Date: Sep 2011
Location: NAP
Programs: LH, BA, TK
Posts: 2,390
Well said Travelsig,
and that's also the case of EK, QR, EY on most (well most...) LH remaining destinations in Asia.
Forrest Bump is offline  
Old Sep 15, 12, 2:52 am
  #28  
FlyerTalk Evangelist
 
Join Date: Jan 2005
Location: VCE
Posts: 14,161
Originally Posted by Forrest Bump View Post
Well said Travelsig,
and that's also the case of EK, QR, EY on most (well most...) LH remaining destinations in Asia.
For Asia- Yes.

For USA as an example- the new Delta business class product is nicer than LH and they have a nonstop to New York and Atlanta daily with perfect timings. Ciao again...
TRAVELSIG is offline  
Old Sep 15, 12, 12:55 pm
  #29  
 
Join Date: Oct 2006
Posts: 1,780
Originally Posted by Tanaka07 View Post
Could we see LH restart service to destinations such as:

Phoenix PHX?
Portland PDX?
Calgary YYC?
Glasgow GLA?
Bratislava BTS?
Hyderabad HYD?

Where would you like to see LH resume services to?
YYC wont happen. It's an AC route now.
CZBB is offline  
Old Sep 15, 12, 6:57 pm
  #30  
 
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,333
Originally Posted by ded0r View Post
I really disagree here. LH management does not get a lot of credit from me these days, but I don't think they are complete idiots. If they make decision to cut service on certain routes, then because these are unprofitable and capacity can be used more profitable somewhere else.



This would only apply if LH decides to leave the aircraft parked instead of reutilizing freed capacity somewhere else. And I don't think that reflects reality
If one examines published data from LH, or when one observes load factors anecdotally, it is hard to argue that LH is capacity constrained.

The essential question is whether one gets more money from customers by flying to/from, for example, Guangzhou than one spends in flying those customers to/from Guangzhou. If yes, then for many several reasons, it makes sense to continue to fly to Guangzhou.

Whether or not the route is earning some kind of acceptable "margin" is not particularly relevant in light of stated strategic objectives of "connecting the world" and the goal of actually earning money.

Flights to Guangzhou are almost certainly not cannibalizing revenue on other routes, and if these flights produce positive cash flow, then it is probably not a good idea to abandon them because they are "less profitable" than other routes.

If capacity is not constrained, the "more profitable capacity" argument is not relevant. If flights to Guangzhou are actually cash flow negative (which is possible, but I doubt), then yes, kill them. Otherwise, the service broadens the customer base and meets the objectives of "making money" AND "connecting the world."
N1003U is offline  

Thread Tools
Search this Thread
Search Engine: