Pre­ci­sion Per­for­mance

Lufthansa Group’s man­ag­ing di­rec­tor of cor­po­rate sales and re­gions North Amer­ica Don­ald Bunken­burg on qual­ity, ser­vice and the bot­tom line

Business Traveler (USA) - - UPFRONT -

BT: The air­line in­dus­try as a whole has seen some­thing of a turn­around in the past cou­ple of years. What’s the out­look for Lufthansa?

BUNKEN­BURG: We ac­tu­ally had a good year. Ex­clud­ing the one offs we were able to in­crease prof­itabil­ity by 62 per­cent. The prof­its were driven on the pas­sen­ger side and also on the MRO side, but re­ally pretty much across the board all businesses have been prof­itable.

BT: You men­tion the Lufthansa businesses; tell us a lit­tle about how Lufthansa is struc­tured.

BUNKEN­BURG: Lufthansa was at one time a fully in­te­grated com­pany with all these com­pa­nies as di­vi­sions. Lufthansa Pas­sen­ger, Lufthansa Cargo, LSG SkyChefs, Lufthansa Sys­tems and Lufthansa Tech­nik. In the mid-90s, we were look­ing at how best to set these com­pa­nies up, and we saw that many com­pa­nies or many ser­vices that sup­port the air­lines were ac­tu­ally prof­itable, but the air­lines weren’t. So that’s when we cre­ated Lufthansa Avi­a­tion Group. We said let’s spin these com­pa­nies off into their own com­pa­nies, and keep them in the Lufthansa Hold­ing. But let them also com­pete within their own in­di­vid­ual spa­ces so that they can of­fer a prod­uct

that’s com­pet­i­tive. If you’re not con­stantly be­ing com­pet­i­tive and in­no­va­tive, you’re los­ing your edge. So we have these cut­ting edge com­pa­nies that are part of the Lufthansa Group, but they also serve the Lufthansa Group.

BT: How does that help with the prof­itabil­ity pic­ture?

BUNKEN­BURG: This has ac­tu­ally been a good busi­ness model for us over the years. It’s in­su­lated us from the ups and downs of the pas­sen­ger air­line busi­ness. So a lot of these businesses off­set the cycli­cal­ity of what we have on the pas­sen­ger side.

BT: Lufthansa has al­ways been highly rated for its qual­ity. What’s on the hori­zon for your cus­tomers in terms of the next level of ser­vice?

BUNKEN­BURG: We want to be­come a leading Five Star air­line in all our prod­ucts, based on the Sky­trax model. We’re al­ready a Five Star air­line in First Class, but we also want to have our Busi­ness and Econ­omy cab­ins, lounges, ground ex­pe­ri­ence, all be Five Star. I don’t know if you know what it takes to be­come a Five Star air­line, but there’s a whole list, a book of cri­te­ria for each in­di­vid­ual com­po­nent. So we’ve talked to the Sky­trax people, and they’ve done an au­dit of us. We now have 12 work­ing groups us­ing those to im­prove the cus­tomer ex­pe­ri­ence as a whole.

BT: You’re adding a Pre­mium Econ­omy prod­uct to your

of­fer­ing. What dif­fer­en­ti­ates Lufthansa’s Pre­mium Econ­omy from other air­lines?

BUNKEN­BURG: The new pre­mium econ­omy seats are com­pletely dif­fer­ent seats. The con­cept is not to have the same seat with just some additional seat pitch, but have com­pletely dif­fer­ent seats. It’s also less seats; for ex­am­ple if nor­mally we have a 2-4-2 con­fig­u­ra­tion, this will be 2-3-2. So it will ac­tu­ally be wider seats but also with more pitch. There’s also a dif­fer­ent ser­vice con­cept. The tray ser­vice will be on china; you’ll get a wel­come drink, you’ll get an amenity kit. So the ser­vice it­self is a to­tally up­graded ex­pe­ri­ence.

There will also be book­able through-fares on these. So it’s not like we’re sell­ing it as a sell-up, as some air­lines do.You can ac­tu­ally pur­chase a through-fare that we’ll have world­wide.

BT: In the chang­ing air­line busi­ness, what chal­lenges lie ahead for Lufthansa?

BUNKEN­BURG: We’re in trans­for­ma­tion. We’re look­ing for more ef­fi­cien­cies. We’re mak­ing sure we’re lined up with our part­ners all over the world. It’s part of a much more com­pli­cated world. If we want to com­pete, we have to make sure that we have top qual­ity.

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