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Lufthansa's New Policy To Oversell First Class  
User currently offlineLondonCity From United Kingdom, joined Nov 2008, 1517 posts, RR: 0
Posted (1 year 1 month 3 weeks 3 days 12 hours ago) and read 20181 times:

At the moment it is only a trial on a select number of long distance routes. But Lufthansa has confirmed that since last July it has been overbooking first class by two seats per flight.

The idea is to better utilise the number of seats in the first class cabin by allowing for the no-show factor.

Lufthansa is saying that the overbooking is made up until 30 days before the flight. If the flight is overbooked it then gives staff 30 days to find an alternative airline or routing for the passenger. Until now, claims the airline, there have not been cases where it has had to downgrade any passengers.

But there is no mention of whether or not Lufthansa staff have had to rebook overbooked passengers with another carrier.

Do you not think this is a risky strategy for Lufthansa to adopt ? After all, first class passengers tend to be not just important but influential too.


http://www.businesstraveller.com/new...nsa-trials-first-class-overbooking

48 replies: All unread, showing first 25:
 
User currently offlinedowntown273 From Spain, joined Aug 2005, 313 posts, RR: 0
Reply 1, posted (1 year 1 month 3 weeks 3 days 12 hours ago) and read 20102 times:

I'd be rather pissed off if I paid LH First Class product and had to fly on an alternative airline that might have a lower product. If it's superior product, then good news!

Say you're booked on a separate airline - would you still get the miles for it? (I.e. LH rebooked you in DL or AA)


User currently offlineblueflyer From United States of America, joined Jan 2006, 4118 posts, RR: 2
Reply 2, posted (1 year 1 month 3 weeks 3 days 12 hours ago) and read 19935 times:
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Usually when a carrier rebooks you on another airline, you can still claim miles as if you had flown your original booking, irrespective of class flown (or booked).


I've got $h*t to do
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3650 posts, RR: 3
Reply 3, posted (1 year 1 month 3 weeks 3 days 12 hours ago) and read 19812 times:

This sounds awfully risky, some of the people who fly 1st class are notoriously demanding, I wouldn't like to have to explain to the likes of Naomi Campbell that their seat had been double booked. Passengers who are apt to demand that all their jelly beans are the same colour are used to either themselves or their employers paying lots of money in order to ensure their demands are met.

User currently offlineFCAFLYBOY From United Kingdom, joined Nov 2006, 604 posts, RR: 0
Reply 4, posted (1 year 1 month 3 weeks 3 days 12 hours ago) and read 19808 times:

while overbooking is standard procedure still at a number of scheduled airlines, this particular policy seems
A little redundant to me? Is it increasing revenue? Perhaps not as seemingly no overbooking have occurred? According to LH anyway. But what really strikes me is this...

A - why overbook a cabin with an already very limited number of seats
B - why do so when said seats and passengers are your most profitable and important

Just seems odd to me...


User currently offlineblueflyer From United States of America, joined Jan 2006, 4118 posts, RR: 2
Reply 5, posted (1 year 1 month 3 weeks 3 days 11 hours ago) and read 19623 times:
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Quoting FCAFLYBOY (Reply 4):
Just seems odd to me...

I don't think Lufthansa does anything without a reason. It may seem perplexing, but perhaps their yield management department noticed the no-show rate in first class was high enough that some degree of overbooking is warranted for some destinations.

Quoting FCAFLYBOY (Reply 4):
Is it increasing revenue?

I suppose that is the point. If it allows them to sell a seat that would otherwise have gone empty, it does increase revenue.



I've got $h*t to do
User currently offlineroseflyer From United States of America, joined Feb 2004, 9690 posts, RR: 52
Reply 6, posted (1 year 1 month 3 weeks 3 days 11 hours ago) and read 19513 times:

This makes sense for certain routes. The rebooking factor is extremely high in some markets and it is almost guaranteed that there will be some passengers rebooking, changing dates, cancelling trips, etc. I remember seeing the DXB bookings and some airlines will overbook by 50 seats because of such a high no show/cancellations/date change factor. 30 days is plenty of time to address any problems associated with overbooking. It’s much different than overbooking 24 hours ahead and hoping someone doesn’t arrive at the airport for a first class international flight.


If you have never designed an airplane part before, let the real designers do the work!
User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 502 posts, RR: 0
Reply 7, posted (1 year 1 month 3 weeks 3 days 11 hours ago) and read 19274 times:

Quoting blueflyer (Reply 2):
Usually when a carrier rebooks you on another airline, you can still claim miles as if you had flown your original booking, irrespective of class flown (or booked).

Depends on the carrier. On US, if you are booked on another * Alliance carrier, you will get the mileage for the segments flown on that carrier. So, if you are due to fly IAD-CLT-MCO and get rebooked to United and fly IAD-MCO, you will only get credit for IAD-MCO.


User currently onlinelightsaber From United States of America, joined Jan 2005, 13433 posts, RR: 100
Reply 8, posted (1 year 1 month 3 weeks 3 days 10 hours ago) and read 19024 times:
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Quoting blueflyer (Reply 5):
It may seem perplexing, but perhaps their yield management department noticed the no-show rate in first class was high enough that some degree of overbooking is warranted for some destinations.

Or plans switch. I noticed LH will only overbook until 30 days out. Plans change... How many LH F class passengers change their flight day within 30 days of a flight? I imagine the fraction is high.

Quoting roseflyer (Reply 6):
This makes sense for certain routes. The rebooking factor is extremely high in some markets and it is almost guaranteed that there will be some passengers rebooking, changing dates, cancelling trips, etc.

   Not missing that sale 30+ days out is well worth it.

Quoting roseflyer (Reply 6):
30 days is plenty of time to address any problems associated with overbooking. It’s much different than overbooking 24 hours ahead and hoping someone doesn’t arrive at the airport for a first class international flight.

   This is almost the opposite of traditional overbooking. A wise policy.

Quoting FCAFLYBOY (Reply 4):
A - why overbook a cabin with an already very limited number of seats

Due to the high rate of no shows LH has been turning away passengers they could carry. I'm certain this is a net positive. And this is done with 30 days for passengers to change flights. I don't know many who fly first, but of them *most* change their flight day within 30 days of the flight. This just locks in a sale that much earlier.

I'd be surprised if there is much worry with only 2 oversales... All airlines who fill a F class cabin should look into this on routes with high cancellation rates.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineroseflyer From United States of America, joined Feb 2004, 9690 posts, RR: 52
Reply 9, posted (1 year 1 month 3 weeks 3 days 10 hours ago) and read 18721 times:

Quoting lightsaber (Reply 8):

I'd be surprised if there is much worry with only 2 oversales... All airlines who fill a F class cabin should look into this on routes with high cancellation rates.

Many already have such policies in place. Airlines are more cautious about overbooking in first or business class, but it happens. Usually upgrade waiting lists are supposed to solve this problem, but sometimes revenue premium cabin demand is high enough.

[Edited 2013-09-30 10:43:29]


If you have never designed an airplane part before, let the real designers do the work!
User currently offlinestylo777 From Germany, joined Feb 2006, 3008 posts, RR: 11
Reply 10, posted (1 year 1 month 3 weeks 3 days 10 hours ago) and read 18610 times:

don't forget the amount of mileage upgrades; those in many cases account for half of the F cabin.

User currently onlinemotorhussy From New Zealand, joined Mar 2000, 3281 posts, RR: 9
Reply 11, posted (1 year 1 month 3 weeks 3 days 9 hours ago) and read 18395 times:

Lucky old Lufty eh that they can overbook the front of the cabin in this day and age when most airlines are struggling to make First viable.


come visit the south pacific
User currently onlinecivetfive From United States of America, joined Jun 2012, 126 posts, RR: 0
Reply 12, posted (1 year 1 month 3 weeks 3 days 7 hours ago) and read 17552 times:

I'm actually surprised that there's significant booking volume 30+ days out. Maybe it varies route to route, but I imagine a fair number of F seats, just like J, are sold relatively close in.

User currently offlinewaly777 From United Kingdom, joined Oct 2012, 337 posts, RR: 3
Reply 13, posted (1 year 1 month 3 weeks 3 days 7 hours ago) and read 17417 times:

Quoting FCAFLYBOY (Reply 4):
B - why do so when said seats and passengers are your most profitable and important

This profitable part isn't accurate, J is the most profitable and has been by an overwhelming majority for a while now....F in airlines, including the ME and the top EU carriers don't make money...except 1 ME which has a marginally profitable albeit the margin being lower than the profit margin they get in Y.

I can understand LH as they've recently halved the no of F seats from 16 to 8 in the large aircraft and taking it off from 25% of the fleet. With the cabin rarely ever being full on the day of the flight...the chances of an extra pax showing up on the day is rare which inturn increases the occupied seat factor better increasing the revenue generation and potential profitability....seems like a good risk.



The test of first-rate intelligence is the ability to hold 2 opposed ideas in the mind concurrently, and still function
User currently onlineN62NA From United States of America, joined Aug 2003, 4576 posts, RR: 7
Reply 14, posted (1 year 1 month 3 weeks 3 days 7 hours ago) and read 16725 times:

Quoting downtown273 (Reply 1):
I'd be rather pissed off if I paid LH First Class product and had to fly on an alternative airline that might have a lower product.

Huh? You mean you would be upset having to fly a UA 757 FRA to EWR? Picky picky picky!  


User currently offlinefinn350 From Finland, joined Jul 2013, 697 posts, RR: 1
Reply 15, posted (1 year 1 month 3 weeks 3 days 6 hours ago) and read 16462 times:

Quoting LondonCity (Thread starter):
. If the flight is overbooked it then gives staff 30 days to find an alternative airline or routing for the passenge

I don't know about the original Spiegel article, but what your source actually says that if the first class is overbooked the person in question might get downgraded to business class. This has never happened during the trial, according to the arcticle.


User currently offlinelax777lr From United States of America, joined Apr 2010, 81 posts, RR: 0
Reply 16, posted (1 year 1 month 3 weeks 3 days 5 hours ago) and read 15151 times:

Rest assured this policy isn't because Revenue Management is bored and is looking to anger valuable customers for the fun of it......... There is obviously under-utilized inventory and an opportunity for improvement. I would also contend that if push came to shove, mileage award F seats would be forced to "be flexible" over paid F seats.

User currently offlineQazar From Canada, joined May 2006, 339 posts, RR: 0
Reply 17, posted (1 year 1 month 3 weeks 3 days 5 hours ago) and read 14990 times:

I think in order to examine the logic behind LH's new approach, we should start by recognizing that First class ticket holders have open tickets therefore allowing them no shows on flights without losing their money, and enabling them to re-book at different dates without any penalties - given availability.

This said, and considering that LH's long-haul fleet are all equipped with 8 first class seats, if 3 of those passengers did not show up for their flight, the flight is now be 3 first class seats short of revenue. Those 3 passengers can now fly on a different date with their ticket. This new approach to overbooking allows LH therefore to ensure that they limit the revenue loss in case of no show, and maximize their revenue stream in the premium cabins.

The problem therefore occurs when all 8 passengers show up, as well as the 2 extra over bookings... LH has said that they have decided to adopt this new strategy on selected routes. It is therefore important to know which routes these are. I believe a first class passenger on LH would not really minds if he/she is put instead in first class on Asiana, ANA, Singapore Airlines or Thai... Therefore I might agree with this strategy on the routes linking Germany with Japan, South Korea, Singapore and Thailand... A LH first class passenger may however have an issue being transferred on the first class of Egyptair, Ethiopian or Air India...

United is a gamble... !!! So I wonder if this trial approach includes US destinations!

Also, we need to know who gets bumped! Example: A flight already has 8 first class passengers, 2 new passengers are overbooked. Are those 2 extra passengers told that they are the overbookings and that there are chances they may not make it on the flight? If so, then the level of client "piss off" may be maintained very low as those passengers bumped are always those that already know their chances may be slim on getting on the flight... As a matter of fact, if I were the overbooked passenger on the LH flight to Singapore, I may wish for the overbooking to hold as that would mean I may get to be on a SQ flight instead!  

All in all, I think this strategy works... However close monitoring must be part of it to ensure they can offload their premium passengers while keeping their loyalty!

Cheers!


User currently offlineckfred From United States of America, joined Apr 2001, 5293 posts, RR: 1
Reply 18, posted (1 year 1 month 3 weeks 3 days 4 hours ago) and read 14625 times:

A friend of mine who is a pilot with AA has told me that often, people flying out of JFK or LAX will double or even triple-book seats in first class. Typically, it's people who work in the financial services sector or entertainment.

I tend to think this is true. Back in December of 2001, my wife and I volunteered our seats on AA flying LAS-ORD. We wound up rebooked to ORD with a connection at LAX. In the past, we had gotten an upgrade to first, when we volunteered out seats.

The gate agent said he could upgrade us on LAS-LAX, but LAX-ORD was full.

Yet, as door was closed on our LAX departure, my wife counted 6 empty seats out of 20 in first (738 in the original seating configuration).

If LH is seeing enough no-shows that it winds up losing revenue (upgrading business or coach flyers, rather than selling first class seats), then the risks of overbooking might be worth it.

Quoting blueflyer (Reply 2):
Usually when a carrier rebooks you on another airline, you can still claim miles as if you had flown your original booking, irrespective of class flown (or booked).

My wife learned the hard way that this isn't true. When her AA flight was canceled (ORD-CLT), she was rebooked on US. She didn't get miles. When she wrote to Customer Service, they told her that the policy was not to credit miles, if a passenger was rebooked onto another carrier.

The next time AA rebooed her onto US, she wrote a letter detailing how she was needing every last flight segment to get gold status. If they wouldn't budge on the policy, she was going to shift flying to her company's preferred carrier, DL.

Needless to say, AA budged and credited her flight.


User currently offlineViscount724 From Switzerland, joined Oct 2006, 25843 posts, RR: 22
Reply 19, posted (1 year 1 month 3 weeks 3 days 3 hours ago) and read 13566 times:

Quoting downtown273 (Reply 1):
I'd be rather pissed off if I paid LH First Class product and had to fly on an alternative airline that might have a lower product. If it's superior product, then good news!

When a passenger can book an F class seat and cancel or no-show with no penalty or cancellation charge, as is usually the case for unrestricted F class fares, why shouldn't the airline equally be permitted to overbook? Hotels also do it. No reason for airlines not to do it for the same reasons. Today's revenue management systems are so sophisticated overbookings rarely turn into oversales.

Quoting FCAFLYBOY (Reply 4):
B - why do so when said seats and passengers are your most profitable and important

Many passengers in F class are probably redeeming frequent flyer miles. And I would dispute the fact that F class seats are any carrier's most profitable. It's not unusual for almost every F class seat on a longhaul widebody to be empty. You could fit about 50 Y class seats in the same cabin area as 8 or 10 F class seats and frequently sell all those additional Y seats. That's why many carriers have been dropping F class over the years.


User currently offlinebhmdiversion From United States of America, joined Dec 2008, 463 posts, RR: 0
Reply 20, posted (1 year 1 month 3 weeks 3 days 2 hours ago) and read 13031 times:

Quoting blueflyer (Reply 2):
Usually when a carrier rebooks you on another airline, you can still claim miles as if you had flown your original booking, irrespective of class flown (or booked).

As a former CSA, if you are rebooked on another airline, you will only receive miles flown on that airline. Example - UA flight BHM-ORD-LHR and BHM-ORD is delayed due to MX, then you could be rebooked BHM-ATL-ORD on Delta, then you would receive Skymiles for the BHM-ATL-ORD legs and would receive Mileage Plus miles on UA to LHR.

If your in that situation, you can always ask (of course, ask) to stay on the same alliance partner. Usually, if there is space the CSA might be able to help... but you can always try.


User currently offlineSelseyBill From United Kingdom, joined Jul 2013, 197 posts, RR: 0
Reply 21, posted (1 year 1 month 3 weeks 3 days 2 hours ago) and read 12943 times:

Quoting roseflyer (Reply 6):
This makes sense for certain routes. The rebooking factor is extremely high in some markets and it is almost guaranteed that there will be some passengers rebooking, changing dates, cancelling trips, etc. I remember seeing the DXB bookings and some airlines will overbook by 50 seats because of such a high no show/cancellations/date change factor. 30 days is plenty of time to address any problems associated with overbooking. It’s much different than overbooking 24 hours ahead and hoping someone doesn’t arrive at the airport for a first class international flight.

I would guess this strategy @ LH is also helped by having a number of other well served 'group' hubs relatively nearby to move people through; (BRU, BER, MUC, VIE, ZRH).

I would also expect that leading airlines will use social media profiles and information to assess which customers are likely to agree to being flexible, and avoid pi$$ing-off those crucial corporate and long-time clients


User currently onlinelightsaber From United States of America, joined Jan 2005, 13433 posts, RR: 100
Reply 22, posted (1 year 1 month 3 weeks 3 days 1 hour ago) and read 12642 times:
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What a classy problem to have... You're going to have to fly *another* first class product...  
Quoting motorhussy (Reply 11):
Lucky old Lufty eh that they can overbook the front of the cabin in this day and age when most airlines are struggling to make First viable.

For first, one is either top of the game or non-viable. But First class seats do not hold their itinerary. Deal dates shift, the filming dates change, or just their mood alters. LH is simply recognizing they have a sell able product in a market with a high cancellation rate.

Quoting civetfive (Reply 12):

I'm actually surprised that there's significant booking volume 30+ days out.

Being from Los Angeles, I'm not. I'm shocked if they aren't booking 6 to 8 weeks out and holding the seats until 2 or 3 days beforehand and cancelling. I've never flown first, but those I have buy tickets way out and hold them. Sometimes they fly and sometimes they cancel.

And then seats open up for those last minute passengers. I know more than a few people who get 'the call' to let them know an F class seat opened up for their flight. (I met some 'hollywood types' when my first child was born. Even stuntmen for C-actors fly first internationally... I'm amazed at the money thrown at 'talent.')

Quoting Qazar (Reply 17):
First class ticket holders have open tickets therefore allowing them no shows on flights without losing their money, and enabling them to re-book at different dates without any penalties - given availability.

   I once needed to take advantage of that as I needed to prove I was flying internationally in the near future.  
Quoting ckfred (Reply 18):

A friend of mine who is a pilot with AA has told me that often, people flying out of JFK or LAX will double or even triple-book seats in first class. Typically, it's people who work in the financial services sector or entertainment.

I'm not surprised. It is their mentality.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineblueflyer From United States of America, joined Jan 2006, 4118 posts, RR: 2
Reply 23, posted (1 year 1 month 3 weeks 2 days 23 hours ago) and read 11564 times:
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Quoting bhmdiversion (Reply 20):
As a former CSA, if you are rebooked on another airline, you will only receive miles flown on that airline.

Then I guess I am very lucky. The (admittedly few) times I have been rebooked on a different airline than the one I chose, I asked for my original miles and got them with no fuss.



I've got $h*t to do
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9191 posts, RR: 15
Reply 24, posted (1 year 1 month 3 weeks 2 days 20 hours ago) and read 9762 times:

Quoting downtown273 (Reply 1):
Say you're booked on a separate airline - would you still get the miles for it? (I.e. LH rebooked you in DL or AA)

Yes you do. Last time I was booked on SQ from HKG to LHR via SIN but the HKG-SIN sector was late which prevented me from getting onto the connecting flight to LHR. And they put me on BA and they gave me full HKG-SIN-LHR miles


25 Ferroviarius : I fear that is exactly why I mean that there should not be anything like 1st class. Nobody should be allowed to control and spend so much money as to
26 LondonCity : There are different aviation markets around the world and first class flourishes in some countries more than others. A global carrier like Lufthansa
27 Rara : I'm sure in this case they wouldn't rebook Ms Campbell but rather Mr Kwon, the South-Korean millionaire that no-one has ever heard of. I can't explai
28 Aesma : What if the flight goes where there is a popular jet set event (say, the Singapore GP), and all airlines F are full on the route ? Better yet, by then
29 Aerosol : It's all about statistics - NetJets is calculating in a similar way (how many jets do I need to have one ready for your customer)
30 a380787 : To cross-rebook between those 2 is already the most desirable outcome ... imagine if they put you on UA AA CA .....
31 LLA001 : I have never flown First Class nor Business Class so I don't have the experience to compare but how horrible would it be to be downgraded from First C
32 washingtonflyer : Most any international F class is significantly nicer. A semiprivate area (business) versus a very private area with more room. For business types, I
33 UA772IAD : I can. It settles the "what if?" factor. Say the person knows with certain certainty they will be traveling around a certain week or month. It is obv
34 waly777 : The revenue management departments will be aware of this event and would also take note of traffic trends in F when similar events occur as well as t
35 Pellegrine : I don't know about this, the assumption is too sweeping for me. It wasn't really recent, as LH blocked 8 of the 16 F seats in 744s years ago. All oth
36 waly777 : Understandable as there isn't much literature on F, however I did finish a thesis on the topic and may publish it in one of the air transport journal
37 Post contains images waly777 : Those are the figures of F for a major airline in the EU from their hub to Boston, and their hub is a major premium market. the % paying are the max
38 Indy : Personally I have always been amazed that it is legal to sell something you don't have. Why is deliberately overbooking a plane legal? I understand th
39 waly777 : LH is referring to just the long haul cabin with award tickets and paid fares. F outside the US generally refers to just long haul style F.
40 Indy : That doesn't seem like a wise move even if it generates a little extra revenue on a single flight. The last thing you want to do is alienate the pass
41 waly777 : Ah but the thing is, long haul F is rarely ever full (still yet to see a fully occupied F cabin tbh). Now F paying pax typically have the flexibility
42 Indy : I understand why an airline might do it. But what I don't understand is what makes it legal. Should the practice be legal? It seems that making it le
43 Pellegrine : I wouldn't mind reading your thesis, but to say no airline in the EU or ME makes money on F except for one is a bit much...[Edited 2013-10-02 15:44:1
44 waly777 : [quote=Pellegrine,reply=43][ I wouldn't mind reading your thesis, but to say no airline in the EU or ME makes money on F except for one is a bit much.
45 waly777 : It should be legal and remain so because it's a business in which the inventory is completely wasted once the aircraft leaves the gate and the seat i
46 Pellegrine : Link me. PM me. We are going to talk about this more later.
47 SIA747Megatop : If I was flying SQ's Suites and was told I'd have to fly LH F to FRA I'd be pretty miffed. There is a massive difference. As far as functionality is
48 a380787 : hehe would you be "miffed" if SQ downgrades you from 388 "R" to barely 77W "F" ? =p
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