In Economy Class, too, the slim construction of the seat backs provides greater leg room, making it easier for you to stretch your legs. In order to demystify the emerging technology, we decided to go straight to the source and interview Simon Rimrod, Head of Revenue Management Pricing / Head of Revenue Management Systems & Solutions, Lufthansa Group and Arber Deva, Senior Director, Head of Distribution Solutions, Lufthansa Group. Deva: The technicality that you described and that Simon ended with is also a part of compromise that we need in our legacy system architecture when you want to service these things. This is clearly the way forward to find the optimal price point. Today’s airline business is evolving into a two-tier industry: global alliances are reaching worldwide coverage and no-frills carriers are gaining market share with a low-cost, point-to-point product. ‍There are more technicalities to consider in order to make smaller consistencies in an interim phase until you can be really end-to-end on an IATA One Order set up, where you don't need to take care of what you have in other systems in place. The cabin of a Boeing 767, for example, will only need five access points which are connected to a central server. As one of the founding members of Star Alliance, Lufthansa is able to offer customers across the globe a more convenient travel experience (Franz 2014). Any recovery of oil prices in the global market will lead to decline in operating profit as fuel costs are going to increase. In this context, Farelogix/ Accelya is our IT partner to power our NDC platform for distribution. With the introduction of the DCC, the Lufthansa Group airlines are no longer passing on these costs at a flat rate, but in a way that reflects the actual cause of the costs. It has been decided that Continuous Pricing only applies if the customer has a price advantage towards the old logic. But the question now during this pandemic is, how quickly can you move forward? Another question is how quickly can we bring it to the market? How can you manage it in your internal systems so that it makes sense? On long-haul routes a seat cushion width of over 40 cm, as well as the individually adjustable headrests on every seat, ensure your comfort. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Regular trainings of our staff ensure instant implementation of innovations and detailed knowledge of the product. Finance strategy. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Rimrod: As the functional department of pricing and revenue management, I would love for that to one day be the case. Therefore, we developed this technological competence, that allows us to create this price point according to what we think is applicable to the market. The airline boasts of having the third largest passenger airline fleet in the world and consists of modern aircrafts. Do you want the price advantage or the ticketing flexibility? The reason why we started embarking on NDC was because we wanted to have certain third-party reach already before we start rolling out continuous pricing because we only benefit from continuous pricing on a mass market. Capital Structure Key Topics. Deva: We need to make sure that the reach of these offers is even higher than it is today. It can be integrated during a regular maintenance check, so there’s no need for extra downtime,” said Dr. Jörg Liebe, CIO of Lufthansa Systems AG. In a recent article, we covered the launch of the product. Realistically, I would say the industry we're in is not always moving as quickly as maybe if you are in a startup industry or in younger industries. Lufthansa Group launched the new pricing model, part of its NDC Smart Offers, in October enabling its airlines – Austrian Airlines, Lufthansa, SWISS and Brussels Airlines – to set fares in a continuous series of price points rather than the 26 alphabetical fare buckets that have traditionally been used. Continuous pricing in my perspective is one USP that the company not only needs for the long term, but also in this moment during the crisis. Marketing. Rimrod: Here we must also first dive into the history. However, we reached a maturity level, and at least for Lufthansa Group, we reached the scale of having over 30% of our agency sales in NDC, which is a significant achievement. Rimrod: First, the size of the change we have brought to the market is not something that you develop within weeks, in a little team, so you can be sure that the whole idea behind it and the commercial strategy behind it is something that we developed over many years. Read Article . Let's take a step back to understand the differences. Rimrod: I would say it has the same effect on demand forecasting as any pricing. ‍The role of the GDS changes from an assembler — as somebody doing the offer creation and distributing it — to only a distributor. In order to bring the offers to our trade partners, we need to construct this ourselves, doing quality assurance right to the point where we assemble it and then distribute it to the other third parties and other aggregators. If you want to decentralize it as it is, it is in a very standardized way; a way that has been there for decades with 26 RBD booking classes. “The system is much easier to install because there is no wiring required. From that perspective, it is not incrementing, but It's decrementing from the next higher price point. Topics: Airline, Brand, Northwest Airlines Pages: 5 (1451 words) Published: March 14, 2013. It's just that the information is more accurate. It is the most fundamental strategy Lufthansa leveraged on, in order to maintain core leadership in the airline industry not only in the European markets, but worldwide as well. The main link is, and I know this is where the airline industry differs, but for us forecasting and segmentation are two different things. Also makes it possible for airlines to offer new forms of customer communication, information and services. The airlines in the Lufthansa Group are positioned as quality carriers in their respective segments. Registered Data Controller No: Z1821391. So, if it simply takes you two to three days to decide, you still will have the opportunity to book the typical price that is also published in the GDS and everywhere else.Rimrod: From a corporate perspective, everything is there as it was beforehand. Â. It offers a global network, shortest transport times and high quality standards in many, often highly specialised, product areas. This reduces annual fuel consumption by around 20 tonnes per aircraft. ‍And not only sell on the Lufthansa dot com, but also sell on other distribution platforms because some potential customers are possibly not going to the Lufthansa website. But there's nothing that the end consumer sees right now, that's more complexity in our back-end systems. With or without the pandemic, we would have been ready to roll out continuous pricing to our NDC channels. ProfitLine - The integrated solution for revenuemanagement and pricing Restarting Revenue Management assisted by Lufthansa Systems' expertise Links Airline Forum 2020 - online edition (Video) Airline Forum 2019 (Video) ProfitLine Suite - The integrated solution for revenue management and pricing That was the legacy role of GDSs for full-service carriers in offer management. VAT Registration No: 842417633. People generally prefer low-cost airline for traveling and it is more convenient. The innovative infotainment system is based on a Wi-Fi network which passengers can log on to through seat-back screens or their own laptops, tablet PCs, smart phones or other Wi-Fi-enabled devices to access a wide range of video and audio on demand, games and other content. Lufthansa Group has been a force for change in airline distribution. Rimrod manages the offer side, while Deva manages the NDC platform and relationships to a portfolio of distribution technology partners, making them the perfect duo to describe the process from end-to-end. So next to our dot com, next to the partners that have access to NDC already. However, willingness to pay of passengers or markets are much more diverse than 26 booking classes. Other GDSs like Amadeus, Sabre and Travelport can easily connect to our NDC interface, as well as the over 70 different aggregators and startups that redistribute our offers to other marketplaces. You may know we still have tickets and PNRs. And clearly, when you have the traditional way of pricing, where you have jumps in between one price point to another, for example, from 100 to 200, with this jump, you lose passengers on the way that maybe have a willingness to pay 150. Deutsche Lufthansa AG is an aviation company with operations worldwide. The generously sized and comfortable seats, the extensive range of entertainment: with the Lufthansa Product Showroom you can now get to know the benefits of our Economy Class on long-haul flights in more detail even before your flight. We are bound to a vast context when it comes to interlining and all that kind of stuff where we are connected. Revenue management and pricing, the cornerstones of a commercial strategy. They will be met by a special Lufthansa guide directly at their gate or at another rendezvous point and accompanied to their destination – for example, to a connecting flight, train, hotel, shuttle bus or to the airport lounge. While one customer looks for economy fares, another one asks for a business class fare, with or without baggage, with or without seat selection, etc. So that means that we would not overshoot in our own channels or the GDS price. Lufthansa Family ServiceThe Lufthansa guides from the Lufthansa Family Service ensure a relaxed start to a holiday by helping families, who are boarding or transferring at Frankfurt or Munich, to find their way around the airport.Â, Parents travelling alone with children, in particular, find this a huge help. We talked with its top distribution boss Tamur Goudarzi Pour to hear what's next. Rimrod: Continuous pricing for me is a method to come up with a price point in a specific moment in time for a certain segment, possibly for a certain channel. However, it doesn’t work with continuous pricing and dynamic offering anymore. “opens up entirely new possibilities for us. To ensure that passengers who are not German speakers and who are boarding or transferring at Frankfurt or Munich, can always find their way around the airport quickly, Lufthansa offers the Lufthansa Guide Service as well as the Lufthansa Family Service, which is designed to meet the needs of families travelling together. Therefore, it's clear that we only can apply it where the technology supports our commercial strategy. This is a benefit we can offer, if you can decide during the day and get your approval process done and whatever else needs to be done. illustration not visible in this excerpt. Lufthansa pricing executive Jörg Hennemann told the paper that the proposed ticket pricing system was aimed at ensuring that aircraft seating was consistently "used to capacity." Next to our dot com, we also depend on our trade partners, so we want to reach trade partners with our continuous pricing. The four categories: Watch Enjoy, Listen Relax, StudyPlay and Fly Lufthansa can be individually downloaded onto the screen at each seat: 65 video options with 30 cinema films in up to eight languages, 25 TV programmes and 10 music magazines from all over the world, 100 CDs, a variety of audio books, 30 radio programmes with numerous international channels, games of skill, action games and board and strategy games as well as language courses are readily available. New services can generate additional revenues for airlines, and airlines can also customize their contact with each passenger. Lufthansa is one of the premier airlines of the world and one of the largest in Europe, in terms of the number of passengers carried by it. That's going to be a benefit for us post-pandemic when flying opens up again — we'll already be ready. Using PROS pricing solutions and Real-Time Pricing Engine, Lufthansa Cargo has accelerated its quoting process and realized a double-digit percentage growth in online sales. We have secured reach for continuous pricing with it being a part of the majority of our sales. There will also be improvements in how we do this and how we do continuous pricing as a whole over time. Therefore, it’s no different than applying any other pricing strategy. In addition, the system costs much less to install and operate than other solutions.”. Offering sophisticated solutions for network planning, scheduling, revenue management and pricing, Lufthansa Systems has an integrated and comprehensive software package to support the commercial management of airlines. Individualised services, dynamic pricing and more direct sales should have an increasingly positive impact on unit revenues, adding up to around 3% by 2022. Lufthansa – Incentives & Pricing Strategies . Increase the reach, we should bring it to the market to as many components of our selling as possible, such as ancillaries. The technology behind Board Connect is not restricted to the aviation industry; it can also be used on other forms of public transportation, such as trains, buses and ferries. ‍When it comes to ancillaries, clearly this is the way forward, and Lufthansa Group has run quite successful test cases to also apply continuous pricing to ancillaries. The primary reason for continuous pricing is to make any price point available that we think is justifiable in any point in time for a certain segment of passengers or certain market. There are more partners connected, but for commercial (and other) reasons, they don't do all their bookings on the NDC channel yet. You're able to benefit from continuous pricing, which is, in all cases lower than the traditional price, or traditional price in the bucket. Technically, it could be more. That makes us sometimes a bit slow in getting to the next level of pricing dynamization or offer management. We will help you to harmonize customer oriented processes and build adequate organizational structures. Condor will be the first airline to install on its Boeing 767 aircraft. At the ITB, Lufthansa Systems presents, its cost-efficient new in-flight entertainment (IFE) system which opens up a new world of opportunities for on-board communication. Lufthansa’s financial strategy is aimed at securing a freedom of action for the Group in regards to its operations, finances, and strategic performance. However, there seems to be a lot of questions and speculation as to the details of Lufthansa’s continuous pricing and what it is and isn’t capable of. Rimrod: To take a simple perspective, this is a lot of the same with different wording. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. In order to address specific needs in the most customer-centric way, we must focus on presenting the offer that best matches the request. Arber Deva: It's the same on the NDC side. Lufthansa offers a Guide Service to international passengers, business travellers, groups and passengers who may, for example, need help finding their way to a connecting flight at the airport or who would like an exclusive passenger chaperone service. I would consider this a success. In order to strengthen Lufthansa’s position still further, new partners from the European home market were added to the Group. LUFTHANSA – SHORT RUN INCENTIVES AND PRICING STRATEGIES COMPANY OVERVIEW Lufthansa is the flagship carrier of Germany and the world's fourth-largest airline in terms of overall passengers carried. The flag carrier of Germany derives its name from Luft (the German word for ‘air’) and Hansa (the Hanseatic Trade Organization that was active in Northern Europe, during the medieval period). On short and medium-haul routes you’ll enjoy plenty of room. We believe we'll have a competitive advantage when we really start flying on a broader scale. he Lufthansa Group announced last week that it has launched an industry-first “continuous pricing” (CP) solution. They are the real king of these airlines because mostly it is an expensive airline without people they can work it out so people plays an important role in the fields of these .They make it more and more popular in case of every factor which support these . When you tilt your seat back, the seat is raised, giving you optimal support, On long-haul flights, as well as reading our in-flight magazine” you can enjoy our extensive In-flight Entertainment Programme during the flight.Â, We offer you menus that suit your departure time and destination. Where we still have limitations in place is on the order management side. Our underlying technology is scaled, but decades old. Lufthansa Airlines offers four types of products to its customers and has adopted variable pricing policy that is value-based. To create this pioneering IFE solution, Lufthansa Systems drew on its experience with the Mobile Infotainment System which it developed for cruise ships. Virgin Atlantic Promotion & Advertising Strategy: The promotional and advertising strategy in the Virgin Atlantic marketing strategy is as follows: Although Virgin Atlantic provides services at par with its competitors, it does not fare as well as it did earlier. Netflix, Spotify und Co. machen es vor: Der Lufthansa Innovation Hub nimmt sich moderne Pricing-Modelle zum Vorbild und krempelt den Flugbezahlprozess grundlegend um. Secondly, of course, vastly available in our NDC channels. We provide organisation and prepare all necessary components of your travel. In Business and First Class every passenger also receives the monthly Lufthansa media world programme listing. In order to better answer customer needs, Lufthansa Group airlines do not According to their study, the demand for air tickets depends on price levels and on the time interval between the purchase date and Volatility in oil prices: Low fuel prices have help to boost the bottom-line of aviation players like Lufthansa, however volatility in oil markets remain a concern. Creation of the offer as Arber outlined, includes the price, what is available, etc. Multifaceted airline processes and an increasingly dynamic market … This way we can make sure the continuous price is equal or lower than the filed ATPCO price. The Lufthansa Group has for some years now been involved in international committees working towards a market-based and competition-neutral system for climate protection fees which would be valid worldwide. That is the demand that is going somewhere else. Our group bookings, for example, of one of our companies within the Lufthansa Group, SWISS, were continuously priced for a long time already. But I think here we have a strong differentiator now, really strong, so that's going to accelerate the reach. Strategic initiatives by the Network Airlines are intended to achieve sustainable increases in unit revenues. The second goal: to give its pricing team science-based, centralized control for rate optimization and management. Economy and premium economy classes are priced lower as they cater to middle class segment. ne of the biggest topics in commercial aviation over the past few months that doesn’t involve the current demand shock has been continuous pricing, specifically the solution the Lufthansa Group has rolled out.

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