“Until now, the percentage of revenue generated from the sale of flight tickets by our airlines has continuously decreased,” said Jens Bischof, member of the Lufthansa German Airlines Board and Chief Commercial Officer (CCO) of Deutsche Lufthansa AG. The airlines of the Lufthansa Group – Lufthansa, Austrian Airlines, Brussels Airlines and Swiss will increase their profitability by redirecting their commercial strategy.
Within this year the Lufthansa Group expects to generate an adjusted EBIT (earnings before interest and taxes) of more than EUR 1.5 billion before costs (strike-related action). This new commercial strategy is to ensure that, in future, a greater portion of the revenue will be earned from flight operations; the actual area of service to the customer.
In the future, the airlines will therefore offer their services on a more flexible and modular basis, with individualized price options and ancillary services. The previously announced group-wide new Economy Class fare concept on European flights, to be introduced by Summer 2015, will enable the passenger to select their desired services, with such fare options as, “Light”, “Classic” and “Flex”. Based on the principle “you only pay for the services you want”, these branded fares will offer a variety of options. More customized services will better reflect customers’ preferences.
The new commercial strategy also includes a clear cost differentiation in the various booking channels. Presently, the costs for using global distribution systems (GDS) are several times higher than for other booking methods, such as their own online portal www.LH.com.
As of 1 September 2015, the Lufthansa Group airlines will, therefore, include a surcharge, the “Distribution Cost Charge” (DCC) of EUR 16 for every ticket issued by a booking channel using GDS. The new charge will not be added to flight tickets purchased using own booking channels. This predominately includes the airlines’ websites (www.LH.com, www.swiss.com, www.austrian.com, www.brusselsairlines.com), as well as, the service center and ticket counter at the airports. Travel agencies will also be able to book tickets without the DCC, using the online portal at www.LHGroup-agent.com.