LH1597

Why is your loyalty program NOT loyal.
- or to put it another way -
Why don't you go back to being low key, agressive and German.

Wombelero

Observing the devaluation of the M&M program. How do they want to keep their frequent flyer customer base loyal? IN a market full of alternatives, especially for premium travelers?

In the past I booked LH/LX in J, even if prices have been a bit higher. This is in serious jeopardy now if they continue the trend (less miles for flights, but more miles and increasing taxes for "free flights").
I am sure there are creative ways to keep customer loyal to a brand (see Migros marketing activities in Switzerland as example!!) but I don't see LH group going that way.
W

N1003U

Thanks everyone for the questions posted so far. Amongst the banter in this thread, I have separated out almost 40 questions, many very good ones.

If you have more burning questions you have always wanted to ask the LH Passage leadership (no matter how big or small), please post them here by Sunday evening. I will see that they all get delivered to LH on Monday.
(that doesn't mean that all questions will get answered, but at least someone from LH will see them)

LH seems genuinely interested to at least hear what is on our collective minds. Whether or not they can or will take our questions and comments to heart and do something about them is another issue, but they do seem to want some direct customer feedback.

If you have ever heard the old joke about the description of a stinking pile of manure being massaged by the bureaucracy until it is described to the CEO as a "powerful medium for growth", you know how customer feedback can be distorted as it is passed up the chain of command in a "traditional" company.

Most executives understand this dynamic, but as those of you who are mangers probably know, it is not always easy from a distance to tell whether bad news is a real problem (which requires attention/solution) or merely people whining because they are clueless and someone actually expects them to do their job, or the complainers are simply detached from reality (which is a waste of executive time).

The smarter executives try to bypass the corporate process once in a while go to the source of the information, and take a reality check. It is easier to judge up close, rather than via layers of corporate structure, what is an important problem, and what is a waste of time.

Since we only have 90 minutes, and I am one of a couple of dozen participants, I don't expect to get to ask more than one or at most two questions. The value proposition of LH offerings (including the M&M program) going forward, and the requirements/issues of small retail customers, are high on my list of things to try to extract/communicate during the interaction.

I have been PM'ing a bit with some of the other participants (most of them I do not know personally outside of this forum), and I think there will be good representation of many of the questions asked here so far (plans for route network, 4U development, response to GCC competition, etc.).

Given the opportunity to ask a question, I will try to ask about something not already discussed.

Thanks again for the questions, and do post any more that are important to you.

fuyao

I got two questions:

1)
Are there any future plans that allow m&m member to redeem themselves award tickets on m&m.com for all *A airlines without calling the hotline? I'm thinking US, UA,...

2)
Why would a m&m member redeem their miles for an award ticket within Europe when they still have to pay a high YQ, such as for FRA-IST still costs more (when keeping in mind the cost for the 15kmiles) than a cash ticket with other airlines who offer the same quality. How about award tickets for short connection flights with almost no fees such as redeeming on UA within the US for 12k m&m miles + $2.50 in tax.

airoli

Thanks for this opportunity.

My question pertains to the recently announced changes in mileage accumulation in M&M for a variety of airlines, but most specifically LX and TK.

I have made bookings on those two carriers for Q2 and Q3 of 2014 before the reduction in accumulation in my travel classes was announced, and have specifically chosen these classes (over the cheapest available ones) for their mileage accumulation.

Now, after purchase, Miles&More has changed the rules. I understand that as per T&Cs, they can do anything they want. But in reality, do they offer a "grandfather" clause for existing PNRs to accumulate as per the rules in place on date of purchase? And if so, how do I go about this?

(For reference, other airlines (UA/AA/AC) have typically protected pre-existing PNRs from changes).

Merci.

outgoing

Why do they make their FFP members feel like idiots? I really feel like being treated as slightly retarded person. Why they can't just say well the times are tough we applied X,Y,Z strategies and among others we are going to cut down on benefits and earnings ladder. If things get better we may or may not change it back. This is fair marketing and I could really understand it and perhaps even mercifully stay with LH cause I have many good memories. What they do, however, is saying that they do us good with all the "enhancements" while in truth it is a downgrade. I am not sure who the hell is working in marketing there but no 1 rule I was taught at marketing 101 is not to treat your clients like idiots if there is a change they will realize how they are treated. Here, LH had 100% change everybody understands the are being F-ed...

NA-Flyer

Why you are forcing your *A other partners like UA to adapt you crazy policies and change redemption levels so they become on line with your overpriced levels?

nswat

Thanks for the thread! need to preface that I work in the travel industry on a B2B level.

I have been thinking long and hard about the miles earning cut in the M&M program, and I think that the initiators of this program change have forgotten the psychology of their passengers.

The program cuts will affect the people that fly regularly with LH Group in Y the most.

These passengers spend a lot more time in LH planes that those earning similar mileage levels and fly in C.

They are by and large passengers that are forced to fly economy due to company policy, BUT, that policy does not mean they can book into B and Y, but specifically have to purchase the cheapest ticket available.This is especially true of publicly funded companies. a lot of them do actually have a choice to fly with other airlines/alliances, but stick with LH group.

Cutting the mileage earnings will force them to leave that program/alliance as the SEN status is one of the few things that make long haul travel somewhat bearable.

Corporate Travel Managers rarely care if their employees are earning miles. They need to get them from A to B efficiently, safely. They will continue to book them into P and Z or higher depending on the level of their contract with LH. And LH will continue to give them kickbacks for this (my term, sure it has a more official name like rebate structure or something like that). So the employee is travelling business in any case, has lounge access, extra luggage allowance etc. He also doesn't have a choice, because he is being sent there.

Lufthansa also always talks about how important their high rev pax are. Well, they are not really. 2 business class seats will account for the same space as 6 economy class seats. those seats will sell for an average of 850 -1000 Euro for a west coast TATL flight. the 2 business class seats will sell for average 2500 euro each. so even at the low end, the economy class seats will sell in sum for the same as the business class seats.

But the program changes are clearly targeting frequent travelers in economy. the average leisure group traveller doesnt even have a frequent traveller card, nor does the once a year traveller going on an annual holiday, and even if he did, the 15000 miles or so that he accumulates clearly is of no concern to M&M or LH, as they cannot do anything, or very little with that.

So why are Lufthansa intentionally targeting the frequent traveler in Economy?

The consequences? They are actually the ones that vote with their wallet, because it will no longer be worth it for them to stick with Miles and More. Their loyalty program is disowning them, so why should they stick with LH?

Case in point. everywhere I fly I connect through FRA, whether its a European destination or international. So I always have at least 1 layover. whether that is in FRA or DXB or IST is almost irrelevant. so what are you doing to keep me with M&M? well nothing really, and the one thing keeping me with you you want to take away as well. And I know for a fact that I am not the only one in this situation.

Having said all that I understand LH position of needing to increase turnover, profitability and loyalty. But there are better ways to do that than alienate the people who are actually your loyal customer base. We book through LH.com, we fly your airline where possible etc. Maybe take an example from the hotels - an eligible flight is one booked through your website - these earn full miles, All Economy fares 100%, B and Y 150%, P 150% Z, C, D 200%, F and A 300%. Flights purchased through intermediaries 3rd party resellers etc earn nothing, but business and first tickets would still retain their benefits of luggage allowance and lounge access.

I guarantee you that would show that LH really cares about its loyal customer base, would slash the exposure you had with mileage accounts, bring an increase in revenue through LH.com.if a customer still chooses to go through a third party, that then becomes their choice but you don't have to reward them for it, as you are currently doing.

LH could actually become a positive trend setter in the airline industry loyalty programs.

whiskey_sk

I tend to disagree here. Most corporate Y travellers must book via the likes of CWT etc, but still bring revenue to LH. The corporate portals offer a choice of airlines and if there is no incentive to book LH, it would cost LH some not insignificant revenue exactly like you explained in your post above.

weero

As I have made up my mind regarding the FPP, I am no longer interested in the opportunity for a manager to embellish the ugly reality of M&M.

But I wonder much about the future Premium Coach. Since LH will roll out Business seats from a decade ago over the next decade, there is now room for an E+ stool without killing all Biz sales.
When, where, and in what density will it come???

Me thinks you have not used that booking engine much. Just for your bragging of what Y & B earn ... how do you book these with that beautiful machine?
Or you could go to the SQ forum and read up on the havoc the broken website has caused to their sales .... they had to revert the very scheme to privilege the flights purchased online.

nswat

In our case we are free to book however we want, but fair point

nswat

Weero, not sure what you mean here. I generally book directly with LH, never had much of an issue.

Was not bragging, but making a suggestion for LH to adopt. If you look at the Hotel Loyalty programs, that is how they work - either book directly with them and gain status and awards or go 3rd party and get nothing. It works for all the big chains, so workable systems do exist that can be adopted. moreover I think it would make a lot of us more willing to book LH if we know that we will also get rewarded rather than shafted.

FelixB

As hotel loyalty programs give you points based on spend, and third parties as Expedia often pay the hotel considerably less than what they charge you, giving you points for a stay would either
(a) reveal how much you have been overcharged
or
(b) mean that you get more points than someone who booked with the hotel directly.

So it's different from how airlines and OTA operate.

NewbieRunner

May I add two low level/value questions? (With apologies to TRAVELSIG!)

1. Arrival/connection in FRA
I can spend the whole evening asking about LH's operation in FRA on topics ranging from security, arrival service (for F pax and HON), use of bus gates, choice of arrival gates, etc. but the question that niggles me most is:

Why can't FRAport/Lufthansa allow passengers from the UK to deplane and enter the terminal behind security (departure level) as they do in Munich and Zurich so connecting passengers don't need to re-clear security? There are currently 29 flights from the UK to FRA, mostly A320s. I understand more than half of passengers from the UK are connecting passengers, so there may be between 2,000 and 2,500 passengers each day from the UK connecting in Frankfurt who are unnecessarily having to go through security check. It's great that passengers arriving from the US no longer need to re-clear security in FRA but can't something similar be arranged for passengers arriving from the UK (and Ireland)?

2. Overcapacity in Germany-Japan flights?
The Japanese authority is opening up additional daytime slots at Haneda Airport in April 2014 including 4 daily slots between Tokyo and Germany. Contoversially ANA has won two slots which are earmarked for airlines based in Japan. (JAL got none.) Two more slots will go to airlines based in Germany. (Any idea what Air Berlin is planning to do? ) LH and ANA already operate 4 daily flights from Germany to NRT between them and ANA has daily flights between FRA-HND.

Some observers believe that 4 more daily flights between Germany and Tokyo may be too many. What is LH planning to do if they get 2 daily slots at HND? Will they transfer some operation from NRT to HND, which is move convenient for most passegers whose journey terminate in Tokyo as well as passengers connecting to domestic flights?

Oh, and a bonus question about FRA. Will there be another SEN lounge where the old A26 Business/Senator lounges used to be (as announced a year ago)?

GBM.flights

1 question from me: What is LH game plan beyond Cost cuts (Score)?

Context:
We saw a lot of cost reduction initiatives in all areas, including cuts in destinations served across all regions (Perm, Kazan, Rostov, Libreville, Pointe Noire, Jakarta, Guangzhou, Kolkata, Hyderabad, Calgary), Destinations planned and never started (MUC-MEX; DUS-NRT), Equipment downgrade (TLV,CAI) and a new Business Class that by the time is fully rolled out will still lag behind direct competition.
So what do you think is LH competitive advantage and what is the 3-5 yr plan (which markets?/ is it growth/ yield/other?) for LH ?

Not even mentioning EK, but BA as an example is increasing destinations (Seoul, Austin), offering longhaul product in markets like MOW, TLV, and rewarding loyalty in their FFP (100% earning in any Eco fare).