Maluku_Flyer

Thanks. Seems that I misremembered the 70K as the total number of SENs. Those were apparently just the numbers for Germany.

Not sure if the numbers really shot up much last year. The reduction to 100K in Germany coincided with the elimination of the 200% Z class and the enhancement of the Swiss biz saver.

SuperFlyBoy

Maybe an indicator for LH would be to see how many SENs are *not* requalifying in this (requalification) year. (They want HON numbers down, so I guess that's going to plan...)

However, it will be more obvious next year and more so the year after next...

I usually buy P fares (used to buy Z) and not T, S, K and the lot...usually Q and above - but that was prior to the latest 50% "enhancement" of economy fares. Now with P being devalued to 100% (with UA), I would choose to skip P and buy economy fares (yes, I did see T/S, etc coming up!) and upgrade for the time being...

LH is really modifying my behavior in the right direction, eh?

Or I would simply fly on UA metal and get my 150% on P fares.

N1003U

Thanks for the further thoughts. You make some interesting points.

The model is a bit more complex than has been discussed here, but not so much more. Each extra passenger adds weight, which adds fuel cost, catering processing, lounge access for some percentage of passengers, etc.). Also the "fixed" costs, such as landing fees, air traffic fees, other airport charges, etc. can vary hugely. Much of those cheap fares are eaten up taxes, so that also has to be taken into account.
Just like the revenues pile up quickly over 180 seats, so do the costs pile up over the layers of complexity in the operation of an airline.

The trick to making money is to get people to pay nearly the maximum they are willing to pay, but without insulting them, and the same time, fill the otherwise empty seats with progressively cheaper fares, until you sell the last seat at a price that just barely covers the variable costs.

The hardest part is to convince people who are willing to pay more to actually pay more and not hold out for the cheaper fares. That is, you need to segment the market with a product that is physically either identical or nearly so.

Travel restrictions are a traditional way to do this. Even the LCCs do this. Yes, you can get some VERY cheap fares on an LCC, as long as you book your flight well in advance, book between 2am and 3am your local time, depart on a Wednesday at 5:30am, and don't bring any luggage along. But if you buy without all of these restrictions (not in advance, at a popular departure time/date, with luggage, etc.), it is not uncommon to pay prices on, say, U2, that resemble what you see on lh.com. I have paid between 75€ and 450€ on U2 between BSL and LGW or STN (a 5:1 ratio over the same route), and I would bet that I added positively to the cashflow of U2 in every case.

I think of an "LCC" as an airline that starts with cheap base fares, and progressively makes them more expensive by removing purchase and travel restrictions.

I think of a "full service carrier" as an airline that starts with expensive base fares, and progressively makes them cheaper by adding purchase and travel restrictions.

The difference is the default behavior of the core customer: does the customer start out wanting to pay for good service, and then trade some service away to get a better price, or does the customer want the best price, and then offer a bit more money to get a bit more service. The difference is subtle, it determines how the product needs to be packaged and promoted.

I feel a new thread coming on: "How does one make LH competitive as a full service airline?" It is easy to complain that LH management is terrible, and they are driving themselves out of business with stupid decisions. It is a bit more of a challenge to say what you would do differently, given the myriad of constraints that LH has to deal with (some unique to LH), and then hold your strategy out for brutal criticism.

NewbieRunner

I checked flightradar24 for the movement of A321 aircraft during the last couple of days and only found one instance where the same plane managed to do 7 segments in a day. Once destinations such as TLV and CAI are involved, one aircraft can only manage 3 segments or 4 at most. The average might be 5 segments a day.

Given that takeoff, landing, ground handling, passenger handling, etc. is expensive, does keeping the aircraft on the ground (or alternatively keeping them in the air) as long as possible save money?

totti

I do not find this incredible at all. M&M had an excellent programme with great perks. Even with the devaluation of the programme M&M has still somethig to offer (though IMHO not excellent anymore). As pointed out in this forum may times, and FFP is not just about earning but also spending miles and I find M&M to be rather good with offering award seats. In comparison, I have way too many Avios in may BA account but I can hardly ever spend them on longhaul premium travel because the lack of availibility.

However, with the changes discussed at the dialogue event I would expect the number of M&M members who really use their account regularly to drop significantly. Mr. Spohr stressed several times that he believes an FFP will matter less in the future and the price (and class of service) will be more important.

sw1x

That's a bit surprising. Given that Lufthansa isn't primarily known for being very competitive on price I should have thought they need to rely quite a bit on loyalty of their customers. Even more so since at least in long-haul their hardware in C isn't that outstanding either.
As much as I appreciate Lufthansa's efficiency and their for my routes laudable on-time record I find their recent price hikes (in connection with a reduction of mileage credits to come) increasingly hard to justify - all the more as their competition (BA) becomes more and more cost competitive.

TRAVELSIG

I was out for dinner last night with three friends who are either HON or SEN (2/1) with LH. We discussed this topic to which they asked "But is the management of Lufthansa working for Emirates?". EK and QR continue to grow aggressively both in Venezia and in Italy in General (MXP especially). The message I heard- while it may work for the strategy of Lufthansa- just pushes the Northern Italian clients ever further towards the GCC.

SuperFlyBoy

+1.



Maybe they are - without even realizing it!

totti

No, you got me wrong on this one. This was not about your decision on why to fly LH (FFP vs. price paid) but about what matters to LH. In former times they were especially looking after their HONs and to some extend also SENs and tried to offer them an excellent experience in hope for more business. These days, they will particularly focus on the price paid and prefer customers who pay more. This is reasonable to some extend because a two time F customer buying an FRA-SFO F fare will most likely generate more profit than a SEN who qualifies on European Y travel with tickets booked in mid tier fare classes (e.g. Q). The only question is whether or not this new focus will work out in the long run and only future will tell.

seat 1a

But the only question is - How many STARS will the twice a year F flyer get

Nick_USA

The sad thing is I can hear NewbieRunner tapping the calculator keys trying to work this out

NewbieRunner

Do you mean in full fare F? Let me see...

Nick_USA

And the answer is (as per the example FRA-SFO) ?????

SuperFlyBoy

Let's see - in terms of profit...yes - the F pax flying twice a year... (How many of those are there?)

So, why reduce the seats in F from 16 to 8 as they have done?

Why not only fly F pax then?

But who are the ones that covers the fixed costs of operations, and a slight profit on top of that - if they are in Q-class?? The SENs flying in Y, right?

They have to segment their pax and make sure they do not lose either one!

Instead, they want to p*ss off their bread-and-butter customers so that they move elsewhere.

Interesting strategy.

:-: :-: :-: :-: :-: ("We wanna be a five-star airline"! )

NewbieRunner

Please see post #14 of the official Status Star thread. Since two F return flights between FRA and SFO only give you FTL status you will need to repeat this for 13.69 years in order to gain :-:.

p.s. Actually two F return flights every other year will be a complete waste as they do not count towards any :-:.