LH Takeover: Your fears for LX Travelclub? - Everybody post please

Old Aug 10, 05, 10:33 am
  #46  
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Basically I can agree to all the arguments of my predecessors here. I also fear that they will cancel TC and only continue M&M. But as far as it looks like they are actually trying to do it "softly". You can earn a lot of M&M miles when you are flying LX (even more than on LH flights) but you get almost nothing on your TC account when you're flying LH. Therefore TC is only worth the mebership when you are flying LX, but not when you are using both airlines.
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Old Aug 10, 05, 10:52 am
  #47  
 
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Quote: If an integration happens why should I pay more to receive less miles, especially for flights within Europe??? AirBerlin offers competitive rates from ZRH (e.g. to Hamburg or Berlin)...

I agree with all the advantes mentioned by the other posters. Up to now I have always managed to pick LX flights proposed by our corporate travel agency for status and full miles accreditation reason. Should status levels or mileage accreditation change significantly with a Swiss M&M program I will not opose to fly Air Berlin (>50 round-trips in the last 12 months, where I flew with LX and could have gone for AB), Iberia or BA any longer and join their respective FFP.
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Old Aug 11, 05, 2:35 am
  #48  
 
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Originally Posted by draker
Quote: If an integration happens why should I pay more to receive less miles, especially for flights within Europe??? AirBerlin offers competitive rates from ZRH (e.g. to Hamburg or Berlin)...

I agree with all the advantes mentioned by the other posters. Up to now I have always managed to pick LX flights proposed by our corporate travel agency for status and full miles accreditation reason. Should status levels or mileage accreditation change significantly with a Swiss M&M program I will not opose to fly Air Berlin (>50 round-trips in the last 12 months, where I flew with LX and could have gone for AB), Iberia or BA any longer and join their respective FFP.
I'm playing the bad guy once again.
Why should a full service airline try to compete with a LCC to win a non high spending customer ?
No offence meant, I'm one of the non high spending customer too (i.e. only cheap restrictive economy for me).
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Old Aug 11, 05, 3:21 am
  #49  
 
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Originally Posted by Volvic
I'm playing the bad guy once again.
Why should a full service airline try to compete with a LCC to win a non high spending customer ?
Easy: because customers don't always fall into well-defined categories (a little like life itself).
This customer, at least, is both "low" and "high" spending - sometimes depending on the promotions! A good mix of C/D (can't see any justification for paying for F out of my pocket - and a fair way to go on the career ladder before anyone pays it for me!) and cheap(est) Y.

I would think many people start on the cheapies and some may "progess" to the higher yielding fares. Which airline / scheme will one go for when one "moves up in the world" - the one that previously acknowledged your business on the cheapies - or the one that wouldn't give you the time of day?
I certainly wouldn't be spending the sort of money / showing the sort of loyalty to LX that I do if the scheme was different.

[At one point in the distant past - Qualiflyer doubled Y/C miles in Europe from 500/1000 to 1000/2000, a huge difference it made to my flying patterns (both "cheap" and "pricey", even then).]

Rgds
Marvin
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Old Aug 11, 05, 5:08 am
  #50  
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Exclamation Booking time

Originally Posted by f4free
... what we are afraid will happen with a possible integration into M&M. Anything that can substantiate statements such as amount of revenue, amount of flights, etc. will surely help.
One very important point that was not mentioned so far is the pre-booking time! With Swiss one can book about one hour prior to departure, with M&L one needs to book about two days in advance! I was often happy about this flexibility with Swiss, and it also makes perfect sense for the airline in order to fill the empty seats!
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Old Aug 11, 05, 9:36 am
  #51  
 
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I wonder if anyone has any idea of the time scale in which M&M will eventually swallow STC. To me, the fact that at STC they seem to be in such a hurry to credit bonus miles for their F/C summer promotion, even though in the rules they state that extra miles will be credited before October, is highly suspicious.
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Old Aug 11, 05, 10:01 am
  #52  
 
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Originally Posted by hilltopper
I wonder if anyone has any idea of the time scale in which M&M will eventually swallow STC. To me, the fact that at STC they seem to be in such a hurry to credit bonus miles for their F/C summer promotion, even though in the rules they state that extra miles will be credited before October, is highly suspicious.
in my experience they always state a "long" timeframe for crediting promotion bonusmiles - but they post it very fast ...

CHris
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Old Aug 11, 05, 3:43 pm
  #53  
 
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20,000 Miles is a fair price for a free ticket

I am mostly worried about the higher price for Miles Tickets.

20,000 Miles takes a long time to get and is a fair price for a flight within Europe.

If the changes the FF system will be much less "sexy" than it is.

SwissM
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Old Aug 12, 05, 5:42 am
  #54  
 
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Originally Posted by Marvin
Easy: because customers don't always fall into well-defined categories (a little like life itself).
This customer, at least, is both "low" and "high" spending - sometimes depending on the promotions! A good mix of C/D (can't see any justification for paying for F out of my pocket - and a fair way to go on the career ladder before anyone pays it for me!) and cheap(est) Y.
yes and no :
one or two high expensive tickets does not really 'cleans' an history full of very cheap ones. I almost won the lottery with my company travel agency and I had a full Y ticket with BA (the pre-LH pretender) and the flight was full. A lot of upgrades and me still in Y (no BA status). I flew in the class I paid for. So the elites got something, I did not but at least I think (?) no one who purchased a lot of BA economy flights got a better treatment. A low spending customer is now more and more counted as an anonymous one-time customer. Does he have 40 cheap R/Ts a year ? Wrong, he was exactly like 40 R/T one-time customer. Why do you need to award a one-time customer ?
I do not like this logic but it's in place and it makes a financial $en$e


Originally Posted by Marvin
I would think many people start on the cheapies and some may "progess" to the higher yielding fares. Which airline / scheme will one go for when one "moves up in the world" - the one that previously acknowledged your business on the cheapies - or the one that wouldn't give you the time of day?
Up to a certain point. I presumed I moved "up" and "down" and I switched ... *A to ST and now to OW (perhaps). Can you explain why a ticket costing a lot more than double is giving you only double miles ? When I was so lucky to use them I was not very satisfied. What I'd like to see and I'll never see, it's a FFP structure where you get as many points as the ticket cost (or even better te financial gain the airline got from your flight). From this point of view, I like a lot the hotel programs : basically 10 points per net USD. And a night cost you whatever thousand points. They do not mind if you obtained them in 2 or 25 paid nights.
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Old Aug 12, 05, 6:09 am
  #55  
 
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FFP models

...And conversely, when on the occasional cheapy, I would like to be "treated" (miles-wise) as the "valuable" member who's just done "all those" C flights.

Originally Posted by Volvic
What I'd like to see and I'll never see, it's a FFP structure where you get as many points as the ticket cost (or even better te financial gain the airline got from your flight).
Me too, or even x% (€/$) off your flight for "Silver" (for a x000 € total spend), 2x% off for "Gold" (2x000 € spent). Other perks (baggage / lounge / waiting lists more or less as they are now).

Believe it or not, this is what a LH ticket sales agent in the town office in BSL, said she thought would make sense for FFPs - about 15 years ago...

It's almost trivially simple - but why does no one seem to do it? Is the more manipulable "emotional" factor of racking up points and status better for the airlines than a simple rebate system, which would perhaps appear better to the "rational" side of the brain (and stand more chance of being rejected?) Why all the complexity, if it is unnecessary?
...Perhaps because all the schemes are at their most attractive for the cardholder when his company is paying for C/F all year and the cardholder flies himself (and family) around in C/F using points on holiday... The benefactor of all these "high value" flights is more often than not, not the person paying for them...

Going out on a limb here, did Delta(?) not try to do something along these lines and end up back-tracking??? No idea of whether this is really so or why.

Rgds
Marvin

Last edited by Marvin; Aug 12, 05 at 6:24 am Reason: Answering my own question
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Old Aug 12, 05, 9:04 am
  #56  
 
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Originally Posted by Volvic
A low spending customer is now more and more counted as an anonymous one-time customer. [...] Why do you need to award a one-time customer ?
I do not like this logic but it's in place and it makes a financial $en$e
Not so fast. I agree that LH&BA may treat people buying cheap tickets as nobodies and don't buy their loyalty. This may make sense if:
1. Your Y-Product is as cheap as your competition. >> Just need to sell it.
2. Your size is so big that even if you don't win on short haul point to point in terms of price, you can afford it because you still win because you fill your planes thanks to your network.

For LX, the case is:
1. Production cost will allways be higher than low cost carriers.
2. The size of LX is far smaller than BA and LX. Therefore, the Network-effect of filling up your short haul routes with profitable connecting passengers is far far smaller.

Therefore (I know I'm repeating myself):
What is good for BA and LH is NOT necessarily good for LX.


Originally Posted by Volvic
What I'd like to see and I'll never see, it's a FFP structure where you get as many points as the ticket cost (or even better te financial gain the airline got from your flight).
So your favourite program would be the ASP (Ashamed Socialists Program) where the airline feels sorry for making profit and extracitng too much money from you. As a gesture of goodwill, they return some of that money back to you.
... I'm not quite sure that this is the reason why FFPs exist.
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Old Aug 12, 05, 9:55 am
  #57  
 
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Originally Posted by LoungeLizzard
Therefore (I know I'm repeating myself):
What is good for BA and LH is NOT necessarily good for LX.
Austrian Airlines was an even smaller airline than LX. LH bought it, they dropped out of qualiflyer (good timing too condidering what happened next), and were absorbed by M&M. Did they go bankrupt? No. They focused on attracting business travellers on some profitable, high-yield niche routes instead.
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Old Aug 12, 05, 10:37 am
  #58  
 
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Originally Posted by hilltopper
Austrian Airlines was an even smaller airline than LX. LH bought it, they dropped out of qualiflyer (good timing too condidering what happened next), and were absorbed by M&M. Did they go bankrupt? No. They focused on attracting business travellers on some profitable, high-yield niche routes instead.
I was waiting for that comparison and there are certainly some similarities to AUA and LX as "small players" vs LH.
Although the ownership of AUA is somewhat different:
Austrian Airlines is owned by OIAG (39.7%), floating stock (43.5%), Austrian institutional investors (10.3%) and Air France (1.5%). (Source )

Let's say, Aua is not bankrupt yet.
Here are some quotes from the Austrian Airlines half year result 2005:

[...]Diese Faktoren führten [...] insgesamt zu einem deutlichen Ergebnisrückgang.

Das Ergebnis vor Steuern beträgt EUR -106,6 Mio. nach EUR -27,5 Mio. im Vorjahr.

Vagn Soerensen, Vorstandsvorsitzender Austrian Airlines zum Halbjahresergebnis 2005: [...]Gleichzeitig haben wir eine umfassende Verkaufsoffensive gestartet und über eine Stützung der Transfergebühren den Umsteigeverkehr gefördert. [...] Aufgrund dieser herausfordernden Situation - insbesondere in Hinblick auf Treibstoffpreise sowie Überkapazitäten - ist für das Gesamtjahr 2005 ein negatives bereinigtes EBIT zu erwarten."
End quote.

Sounds like "attracting business travellers on some profitable, high-yield niche routes instead" was not all that successfull for them either.

You may also look at their shares. This info provided by their biggest shareholder OIAG.

...to come back on topic: This is exactly what I'm afraid of: No future for LX if LH messes up with STC.

Last edited by LoungeLizzard; Aug 12, 05 at 11:13 am
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Old Aug 12, 05, 10:50 am
  #59  
 
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What's your point? Are you implying that, by contrast, LX is financially healthy and therefore it can afford running a generous FFP such as TC?
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Old Aug 12, 05, 11:22 am
  #60  
 
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My point is (repeating myself one more time, sorry) that the current STC is an effective tool to attract customers for LX. M&M is far less suitable for LX's needs.

LX needs support on the European Network.
LX does NOT need help on the longhauls and in paid C or F.

You might even say that giving more miles in C and F is a waste of money because most of the paid C and F tickets are far less responsive of mileage levels. Most paying C and F customers choose flights based on schedule, product&price, reliability but far less on the extra bonus miles.
What's the big advantage of lounge access, separate check-in etc when you travel F or C anyway?

The idea of a FFP is to have a postitive Impact on your Result, mainly by attracting extra traffic you would otherwise not have. Therefore it's even more important that LX has a good programm taylored to it's needs.
I strongly oppose the point that the more "generous" the FFP the more money an airline looses.

Last edited by LoungeLizzard; Aug 15, 05 at 1:31 pm
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