Uli

they should just stop giving hon miles for Y-class bookings

SenAOI

Which kind of Y-class? The LH revenue for Y-flex-bookings is much higher then C. Let's stay with AOI. 1 C ticket is to seats. 1 Y ticket costs about 100Euros less but just one seat.
The finetunig between booking classes and mileage earnings is a very sensitive thing. If LH doesn't want to loose their most loyal customers they have to reflect all those decisions very careful.
Salve Luigi

SMK77

Most bigger companies have contracts with LH and they pay a lot less than the official price... (If you are still paying 100% of the published fare, you maybe wanna talk to your account manager at LH... I charge 35% of your net savings the first year for that... *g*) Discounts are higher than for long haul and taxes are eating up a larger portion for the short haul tickets as well, so there is not that much left that can justify a HON lounge and limousine service in FRA... Remember: the short haul passenger is driven 10 times more often than the F customer (1x) for spending the same amount...

In an ideal world, LH would actually reward profitability but that cannot be made transparent, so revenue earned after taxes (and that is what SQ is more or less doing) is an excellent starting point in reality...

weero

What I always find fascinating about his amazing insight is that the marketing vultures - with the inertia of about 4-5 years follow it. Implementing the assumption that the customer is of the diligence of a grazing hippo and can be usurped as scheduled.
Frequentflyer incentives were and are created to lure in and bind more customers, not to minimise airline expenses. And while Wolfi and others could learn a lot from Ryanair, customer service still is what the name says, even if on the accounting side it lists as a negative .
And that is not what the airline wants???
If you don't like customers do what the Wolf does plus uglyfy the lounge experience, loose a bit more luggage, open an ICC. There are gazillions of easy ways to cull the number of pax, I am sure.
Good luck mate! An IT that cannot dig out some etickets, which cannot credit miles according to booking classes should now suddenly retrieve the value of the fare paid. I'd reckon that for a substantial amount of the tickets sold, LH has no way to determine its actual sales prices ... even if they had working software.
Making random estimates what a ticket was worth might work medium-well with the administration culture here but it would infuriate say roughly 100% of all DE based elites.

SleepOverGreenland

Let's see: 50K € p.a. on FRA-SFO in C is 9 roundtrips (each ~5'600 €)

• ends up with 230'238 HON miles as a SEN
• ends up with 255'834 HON miles as a HON

D fare even allows for 2 more flights (+ 22%), so earns 22% more HON miles.

So, how did you manage to end up with 150K miles only? Flying just to Japan, which is the most expensive route?

SenAOI

As I'm self employed I don't have an account manager.
So I' booking by internet or my TA does the job.
Salve Luigi

SmilingBoy

Hmmm. It seems you are right. I just estimated what I would have gotten flying to South Africa with LH. I did also fly with SAA a few times (before they were in *A) and had a few one-ways thrown in, as well as a F YY ticket. I did not have status before these trips, so a few without executive bonus, too.

When flying BRU-FRA-CPT vv with LH on a CRT fare for EUR 8,008 incl tax, one earns 31,266 miles incl. executive bonus. For €50,000 you can do this trip 6 times, so you earn 187,596. If you start off without status, you lose executive bonus of 7,836 miles for a total of 179,760 miles.

So, about 180,000 HON miles for €48,000. €60,000 would get you around 230,000 miles. In any case, MUCH easier to get to €60,000 than to 600,000 HON miles that are currently needed. The suggestion was that changing from 600,000 miles to €60,000 one would end up with less HONs; I think that this is clearly not the case.

SmilingBoy.

SleepOverGreenland

Never fly Y classes myself, but still WHY?

The only thing I never fully understood was the fixed executive bonus. Getting either 25% or 50% independent from booking class really benefits the more often flyers on cheaper tickets. Since I'm just on premium tickets I would personally prefer to get back to the old way with a percentage value on top of the earned miles.

Then again, I don't like the idea of "minimize number of HONs". Airline industry will fall down into another hole sooner or later and latest by then they will be happy for each single loyal flyer. They should not upset a good part of their cash cow, when the business situation is currently on the top-side.

totti

I agree. Propably they shouldn't send their engery to decrease the number of HON's but just get some more employees to cope with the growing number of HON's. I know that space is limited in the FCT and it's not that easy to find a solution here but I am sure that there are ways to do so if LH really tried to.

tcswede

Interesting side point raised out of the two quotes - are the HON here / out there the corporate type or self employed ?

I have just made the transition from the former to the latter...

Cheers

Thomas

SmilingBoy

Agreed. Surely they made a calculation beforehand what the HON programme would cost (x million euros), and what additional profits would be brought in (x+y million euros) because of people switching to LH. Surely, if they realise that they have been more successful in making travellers fly LH and make HON than anticipated, their profit increased even more than planned. The rational response would be to increase capacity - build a second FCT, hire more PAs etc etc - and not drive some of the people they lured away.

SmilingBoy.

SenAOI

How do the germans say? "Das ist der Fluch der guten Tat." oder "Wie werde ich die Geister, die ich rief, wieder los?"
Salve Luigi

silversurfer

With a 750.000 miles benchmark But the problem is, you donīt want to lose them all or you can let the FCT to SQ, BA or TG

totti

But why get rid of them? Are HON pax. too expensive? Actually I doubt it. Well sure a HON pax is most likely more expensive than a normal F pax who doesn't even care about an FFP. But I always thought that the former one is much more valuable for an airline (because he is much more predictable).

flamboyant 1

LH must be glad for HON pax as they theoretically should be the most loyal and profitable customers in the long run...I am sure LH did make plenty of calculations before launching HON...possibly LH even wasted money on a consulting firm!