New milestone reached
Lufthansa bundles awards business in Miles & More GmbH
Latest news from the Miles & More program: activities of Miles & More International
GmbH and the Miles & More awards business are now being managed from a single
source. The Lufthansa Worldshop is also being integrated into the new Miles & More
GmbH as the third component. Exciting challenges await the almost 200 staff who are
already working under one roof at the new location.

Main Airport Center at Frankfurt Airport – on the first and
second floors, the smell of fresh paint lingers in the air.
Removal boxes are being unpacked, and site plans on the walls
and doors show where the different departments are located
and where all the staff have their desks. The mood for change at
the still young Miles & More GmbH company is palpable in
every corner of the new open-plan office complex.
“Lufthansa founded Miles & More in 1993. Now, 21 years
later, we have come of age,” reports Co-Managing Director
Harald Deprosse, who is responsible for the Award Program,
Finance & Operations division. With about 28 million participants,
Miles & More is now the largest airline loyalty program
airline in Europe. “And the many awards we have won confirm
that it is also the best program,” he adds. Prizes are one thing,
and the operating result is another matter – and it, too, is
impressive. After all, in recent years Miles & More has regularly
made significant contributions to the Group’s net profit.
“Spinning off the customer loyalty program is not an entirely
new idea,” Deprosse says. “Air Canada, for example, outsourced
theirs several years ago, although they sold off their
program with the aim of investing the proceeds in their product
and their fleet.” However, a decision like that always entails
a risk of losing contact with the customer. “We have always
stressed the importance of the customer loyalty program for
our core airline business and pointed out that any outsourcing
must fully comply with entrepreneurial logic. And the ‘loyalizing’
function must be guaranteed.”
But why was it decided at this stage to spin off the awards
business a wholly owned subsidiary? “The driving force
behind the decision was the idea to further develop Miles &
More and make the separately managed organizational units
more effective, and on the other hand to systematically expand
the commercial side of the program,” Deprosse explains. This
would generate additional earnings for the Group and also
make the value created by the business more transparent. “We
already have a large non-air partner network and business
volume. But there is still a lot of room for upward growth.”
“What’s special is the fact that we have not spun off the entire
Miles & More program but only the awards business.” Direct
responsibility for the airline-specific ‘status world’ will remain
with Lufthansa, at FRA LP. As a result, the two subsidiaries –
Lufthansa Worldshop GmbH and Miles & More International
GmbH – have been merged. The main department at Luft -
hansa, FRA LL, has been dissolved and the awards business
functions have been outsourced from Lufthansa to Miles &
More International GmbH. As a clear sign of the realignment,
the new company will be called “Miles & More GmbH”.
“Entrepreneurship is always closely bound up with taking
business risks,” Deprossse notes. “We have to manage risks in
the new company and do everything to ensure we achieve the
success we are striving for.” But of course we will have to pay
particular attention to a few issues. “On the one hand, we have
status management, which has remained in place at Lufthansa
– and on the other hand, the awards business that has been
spun off to Miles & More.” The customer does not distinguish
between the two, and perceives both as Lufthansa. “That is
why, despite our internal reshuffle, we must have a uniform
presence and ensure that we are perceived as a single company
by the customer.”
Nothing will change for Miles & More participants, except that
in future, from a legal point of view, they will have two contractual
partners: Lufthansa and Miles & More GmbH. At the
same time, the strategic realignment of the awards business
will require staff to think and act in a totally different manner.
Harald Deprosse: “At Worldshop we used to consider what we
could do better, for example, in the mail order sector. Today
the question is far more holistic as regards the management of
different channels. Our outlook, our perceptions and our
actions will be more focused in terms of customer loyalty.”
And the second change for staff has more to do with practicalities.
“We are now based at one location with nearly 200
colleagues. We are well networked and we can act swiftly.”
Miles & More is therefore now more like a speedboat than an unwieldy tanker.

And what does the future look like for Miles & More? “We
must aim to be the best,” Harald Deprosse says. “Manager
Magazin recently presented Miles & More an award for being
the best frequent flyer program. And the article then went onto
say how other programs had caught up and that we were only
just the best frequent flyer program. The next time I would like
to read once again that we are the outright number one
winners, and not that the competition has improved. That
must be our common aim.” The message is loud and clear –
just as you would expect from someone who has come of age.

...With about 28 million participants,
Miles & More is now the largest airline loyalty program
airline in Europe. “And the many awards we have won confirm
that it is also the best program,” he adds.

Prizes are one thing,
and the operating result is another matter – and it, too, is
impressive. After all, in recent years Miles & More has regularly
made significant contributions to the Group’s net profit.

“On the one hand, we have
status management, which has remained in place at Lufthansa
– and on the other hand, the awards business that has been
spun off to Miles & More.”