LHs strategy: discussion thread for customers, investors, consultants & armchair CEOs
Jan 12, 2014, 6:26 pm
#76
Join Date: Aug 2004
Location: OSL/IAH/ZRH (time, not preference)
Programs: UA1K, LH GM, AA EXP->GM
Posts: 38,265
But the issue is a lot worse here as the flight had I when I booked it....
Jan 12, 2014, 6:29 pm
#77
Join Date: Jul 2004
Location: PMI
Programs: BA,LH,CX,EK SPG,IC mainly and a few others
Posts: 1,862
I am glad that you are participating in a kind of discussion now. So much easier to demonstrate that you don't even get the basics right:
LH offered 3.7% less flights: that doesn't look like offering more destinations or more frequencies. As far as I know, they stopped KUL, SGN, and CGK - just to name what happened around Singapore.
LH sold 2.3% more RPK - that's due to bigger birds and higher seat loads. Success? No because they had to lure in the additional pax at heavily discounted prices. Any LH executive will confirm that (even to you). That's their biggest headache at the moment: Can we fill the capacity in 2014 and how?
LH offered 3.7% less flights: that doesn't look like offering more destinations or more frequencies. As far as I know, they stopped KUL, SGN, and CGK - just to name what happened around Singapore.
LH sold 2.3% more RPK - that's due to bigger birds and higher seat loads. Success? No because they had to lure in the additional pax at heavily discounted prices. Any LH executive will confirm that (even to you). That's their biggest headache at the moment: Can we fill the capacity in 2014 and how?
I will write up what his thoughts were sometime this week (quite interesting by the way). But one interesting point was that there is no unique Lufthansa miracle going on. All European big three- IAG, LH and AF/KL are cutting cost. AFKL has something called Transform2015 going on with serious cost reductions including getting rid of pilots and employees. IAG has been reading the riot act to IB.
All of them have significant degrees of improvements in key operating factors. All are expecting to make operating profits in the region of EUR 1.5-2 billion in 2015. He thinks IAG will definitely make it, LH should be able to do it and AF/KL should make about half of it. Most of it has to do with improved global economy.
We also talked about managements, gulf carriers, how the airlines are exposed to competition etc. I will need to write up all this stuff and post it when I get some time.
Jan 12, 2014, 6:32 pm
#78
Join Date: Aug 2004
Location: OSL/IAH/ZRH (time, not preference)
Programs: UA1K, LH GM, AA EXP->GM
Posts: 38,265
Superior judge with a free SEN card and under the sway of the justice minister "you have to look at the average customer who cannot afford Biz and also cannot afford to change their ticket ... the spirit of the law is such that .. enter reference to Moses/Von Richthofen, or Louis XIV..".
Jan 12, 2014, 7:24 pm
#79
Join Date: Dec 2007
Location: ORD
Programs: BA, AA, SQ, UA, AC, WS, MR TIT
Posts: 8,659
Jan 12, 2014, 7:31 pm
#80
Join Date: Dec 2007
Location: ORD
Programs: BA, AA, SQ, UA, AC, WS, MR TIT
Posts: 8,659
Jan 12, 2014, 9:00 pm
#81
Join Date: Dec 2001
Location: hamburg
Posts: 1,390
so much for the "happy" LH family...
"Die Welt"; jan. 13., 2014
Luftfahrt: Die 5000 Lufthansa-Piloten drohen mit Streik
Die rund 5000 Piloten der Lufthansa drohen mit Streik. Die Gewerkschaft VC Cockpit habe eine Urabstimmung eingeleitet, sagte ein Gewerkschaftssprecher. Damit könnte Europas größter Fluglinie in wenigen Wochen ein Arbeitskampf drohen.
Der aktuelle Konflikt entzündet sich an der Kündigung des Tarifvertrags zur Alters- und Übergangsversorgung. Bislang wurden Piloten der Lufthansa spätestens mit 60 Jahren in Rente geschickt. Doch der Europäische Gerichtshof (EuGH) erklärte die entsprechende Regelung 2011 für unzulässig.
Da die Piloten jetzt bis 65 arbeiten könnten, entfalle auch die Notwendigkeit einer Übergangsversorgung, argumentiert die Lufthansa. Der Vertrag sei deshalb zum 31. Dezember 2013 gekündigt worden.
Airline hofft weiter auf Einigung
Die Gewerkschaft erklärte hingegen, die Übergangsversorgung sei für die Piloten immens wichtig, ihre gesamte Karriereplanung sei darauf ausgerichtet. Daneben ziehen sich die Verhandlungen über einen neuen Gehaltstarifvertrag bereits seit zwei Jahren hin.
"Wir suchen weiterhin das Gespräch mit der Gewerkschaft", sagte ein Lufthansa-Sprecher. "Wir sind nach wie vor zuversichtlich, dass wir eine Einigung mit den Piloten finden werden." Bis auf die Piloten hätten sämtliche Berufsgruppen ihren Beitrag zum Sparprogramm Score geleistet.
Mit dem Sparprogramm will die Lufthansa den operativen Gewinn bis zum nächsten Jahr auf 2,3 Milliarden Euro steigern. Der Weg ist noch weit: Für das gerade zu Ende gegangene Jahr sind bis zu 700 Millionen Euro angepeilt.
Luftfahrt: Die 5000 Lufthansa-Piloten drohen mit Streik
Die rund 5000 Piloten der Lufthansa drohen mit Streik. Die Gewerkschaft VC Cockpit habe eine Urabstimmung eingeleitet, sagte ein Gewerkschaftssprecher. Damit könnte Europas größter Fluglinie in wenigen Wochen ein Arbeitskampf drohen.
Der aktuelle Konflikt entzündet sich an der Kündigung des Tarifvertrags zur Alters- und Übergangsversorgung. Bislang wurden Piloten der Lufthansa spätestens mit 60 Jahren in Rente geschickt. Doch der Europäische Gerichtshof (EuGH) erklärte die entsprechende Regelung 2011 für unzulässig.
Da die Piloten jetzt bis 65 arbeiten könnten, entfalle auch die Notwendigkeit einer Übergangsversorgung, argumentiert die Lufthansa. Der Vertrag sei deshalb zum 31. Dezember 2013 gekündigt worden.
Airline hofft weiter auf Einigung
Die Gewerkschaft erklärte hingegen, die Übergangsversorgung sei für die Piloten immens wichtig, ihre gesamte Karriereplanung sei darauf ausgerichtet. Daneben ziehen sich die Verhandlungen über einen neuen Gehaltstarifvertrag bereits seit zwei Jahren hin.
"Wir suchen weiterhin das Gespräch mit der Gewerkschaft", sagte ein Lufthansa-Sprecher. "Wir sind nach wie vor zuversichtlich, dass wir eine Einigung mit den Piloten finden werden." Bis auf die Piloten hätten sämtliche Berufsgruppen ihren Beitrag zum Sparprogramm Score geleistet.
Mit dem Sparprogramm will die Lufthansa den operativen Gewinn bis zum nächsten Jahr auf 2,3 Milliarden Euro steigern. Der Weg ist noch weit: Für das gerade zu Ende gegangene Jahr sind bis zu 700 Millionen Euro angepeilt.
Jan 12, 2014, 10:59 pm
#82
Original Poster
Join Date: Apr 2005
Programs: Hyatt Lifetime Globalist, SQ PPS Solitaire
Posts: 3,600
Jan 12, 2014, 11:49 pm
#83
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,335
...I called some favours and managed to speak to an industry expert today- the head of global avaiation practice of my previous employer which is a top tier strategy consulting firm (which also has LH, IB and AF as clients) so I am a bit more clear as to what is going on.
I will write up what his thoughts were sometime this week...
I will write up what his thoughts were sometime this week...
(Edit: which includes a few of the regular folks here also, BTW...
)
Jan 13, 2014, 1:31 am
#84
Join Date: May 2009
Location: SIN (with a bit of ZRH sprinkled in)
Posts: 9,456
That one is easy! Lower ranked judge who tries to uphold the law and the Grundgesetz: agrees that this illegal advertising.
Superior judge with a free SEN card and under the sway of the justice minister "you have to look at the average customer who cannot afford Biz and also cannot afford to change their ticket ... the spirit of the law is such that .. enter reference to Moses/Von Richthofen, or Louis XIV..".
Superior judge with a free SEN card and under the sway of the justice minister "you have to look at the average customer who cannot afford Biz and also cannot afford to change their ticket ... the spirit of the law is such that .. enter reference to Moses/Von Richthofen, or Louis XIV..".
Jan 13, 2014, 2:03 am
#85
Suspended
Join Date: Aug 2008
Programs: Everything is refundable
Posts: 3,727
There is nothing to do with trust here- I offered EUR 30K to LH for four seats, they decided they might be able to make more than that. I decided I will fly someone else.
Can you blame me- unfortunately for LH I am not a captive customer and people have options.
Now the flights are showing F7 A2 and F8 A2 by the way.
Can you blame me- unfortunately for LH I am not a captive customer and people have options.
Now the flights are showing F7 A2 and F8 A2 by the way.
Obviously, based on very complex calculations, they assume to fare better by not discounting 50% of their F cabin.
You found a better deal on BA, so you should be happy and not complain about LH not appreciating your business.
Again, it is tough to be told to f*** off, especially with 30k in your wallet, but so far LH seems to be rather successful telling people to fly the competition.
Jan 13, 2014, 2:09 am
#86
Suspended
Join Date: Aug 2008
Programs: Everything is refundable
Posts: 3,727
Again, it is mostly the economy driving airline business.
BA (especially at IB) did their homework as well (which does not mean that they can relax now) so they will reap the benefits.
As a former consultant, you should be well aware how companies act in highly cyclical industries. After earning a record profit in 2015, all airlines will be subject to a tougher environment again in the next downturn.
Big difference then, less competition, stronger co-op, but still weaker overall demand, so the best (like LH in the last downturn) might even avoid losing money.
Jan 13, 2014, 2:16 am
#87
Suspended
Join Date: Aug 2008
Programs: Everything is refundable
Posts: 3,727
Since FD1971 put a bee in my bonnet yesterday, I called some favours and managed to speak to an industry expert today- the head of global avaiation practice of my previous employer which is a top tier strategy consulting firm (which also has LH, IB and AF as clients) so I am a bit more clear as to what is going on.
I will write up what his thoughts were sometime this week (quite interesting by the way). But one interesting point was that there is no unique Lufthansa miracle going on. All European big three- IAG, LH and AF/KL are cutting cost. AFKL has something called Transform2015 going on with serious cost reductions including getting rid of pilots and employees. IAG has been reading the riot act to IB.
All of them have significant degrees of improvements in key operating factors. All are expecting to make operating profits in the region of EUR 1.5-2 billion in 2015. He thinks IAG will definitely make it, LH should be able to do it and AF/KL should make about half of it. Most of it has to do with improved global economy.
I will write up what his thoughts were sometime this week (quite interesting by the way). But one interesting point was that there is no unique Lufthansa miracle going on. All European big three- IAG, LH and AF/KL are cutting cost. AFKL has something called Transform2015 going on with serious cost reductions including getting rid of pilots and employees. IAG has been reading the riot act to IB.
All of them have significant degrees of improvements in key operating factors. All are expecting to make operating profits in the region of EUR 1.5-2 billion in 2015. He thinks IAG will definitely make it, LH should be able to do it and AF/KL should make about half of it. Most of it has to do with improved global economy.
And as pointed out weeks ago already, he seems to agree with me re. AF/KL and their delay in restructuring. And, of course, most of it has to do with the improved global economy (and the relevant rounds of cutting bennies within the airlines)
weero has pointed out that the FT audience is rather special, so one cannot blame them for believing that loyalty schemes are the key parameter when it comes to the success of airlines. In reality, other factors are way more important.
Last edited by FD1971; Jan 13, 2014 at 2:21 am
Jan 13, 2014, 2:21 am
#88
Suspended
Join Date: Aug 2008
Programs: Everything is refundable
Posts: 3,727
Some FT regulars like to question the knowledge of industry experts, because they know better how to manage an airline, even without relevant degrees, knowledge, experience, contacts, data etc.
Jan 13, 2014, 3:04 am
#89
Join Date: Jul 2004
Location: PMI
Programs: BA,LH,CX,EK SPG,IC mainly and a few others
Posts: 1,862
Again, do not take it so personal.
Obviously, based on very complex calculations, they assume to fare better by not discounting 50% of their F cabin.
You found a better deal on BA, so you should be happy and not complain about LH not appreciating your business.
Again, it is tough to be told to f*** off, especially with 30k in your wallet, but so far LH seems to be rather successful telling people to fly the competition.
Obviously, based on very complex calculations, they assume to fare better by not discounting 50% of their F cabin.
You found a better deal on BA, so you should be happy and not complain about LH not appreciating your business.
Again, it is tough to be told to f*** off, especially with 30k in your wallet, but so far LH seems to be rather successful telling people to fly the competition.
I have not flown AA in ages, my TA assures me that the new F hard product is very good. Worth a try.
Jan 13, 2014, 3:07 am
#90
Join Date: Jul 2004
Location: PMI
Programs: BA,LH,CX,EK SPG,IC mainly and a few others
Posts: 1,862
Same rationale over here, which is also reaffirmed by IATA, so not surprising.
Again, it is mostly the economy driving airline business.
BA (especially at IB) did their homework as well (which does not mean that they can relax now) so they will reap the benefits.
As a former consultant, you should be well aware how companies act in highly cyclical industries. After earning a record profit in 2015, all airlines will be subject to a tougher environment again in the next downturn.
Big difference then, less competition, stronger co-op, but still weaker overall demand, so the best (like LH in the last downturn) might even avoid losing money.
Again, it is mostly the economy driving airline business.
BA (especially at IB) did their homework as well (which does not mean that they can relax now) so they will reap the benefits.
As a former consultant, you should be well aware how companies act in highly cyclical industries. After earning a record profit in 2015, all airlines will be subject to a tougher environment again in the next downturn.
Big difference then, less competition, stronger co-op, but still weaker overall demand, so the best (like LH in the last downturn) might even avoid losing money.