Lufthansa embraces data analysis to offer passengers customized service

Lufthansa Group is aiming to offer passengers service “personalized on a silver tray”

by utilizing “predictive analytics” to determine what offerings individual customers want, a senior executive said.

Speaking to reporters during a Feb. 2 briefing in New York, SVP sales-Lufthansa hub airlines and CCO-Frankfurt hub Heike Birlenbach explained that Lufthansa plans to “pinpoint the respective needs of an individual customer rather than offering them everything we have.”

The initiative is part of Lufthansa Group’s $430 million investment in digitalization through 2020. “We have customer data about activities” that can be analyzed and utilized to explore revenue opportunities, Birlenbach said. “For example, we have learned there is a certain timing when a customer is looking for an upgrade, and it’s not when the ticket is booked or on the day of the flight. [The ideal time to offer an upgrade is] in between purchasing the ticket and the date of flight. [Lufthansa has analyzed data to determine] when is the best time a customer would respond to an upgrade offer.”

Lufthansa believes communication with passengers via smartphones and other devices should be ongoing, and not limited to the day of ticket purchasing and the day of flight. It is enabling passengers to choose onboard entertainment options as much as six weeks ahead of a flight, for example.

Lufthansa will also make sure a passenger has the digital reading material he or she wants. It is offering passengers 250 digital titles in 18 languages. “The times are gone when we say, ‘The magazine is not available because the last customer took it’,” Birlenbach said.

The data used to tailor offerings to passengers is “not necessarily linked to the frequent flyer program,” Birlenbach noted. The data could come from a joint venture partner’s frequent flyer program or just from general information about passengers flying aboard Lufthansa Group airlines.

“The key is who has the basic data,” added Lufthansa Group VP sales-Americas Tamur Goudarzi-Pour. “We have the data that many players in the industry [such as airports] do not have. If we know you have a 3-hour transfer time, but you are not a frequent flyer, we’ll offer you access to the airport lounge [on the day of the trip for a price]. But we do not want to overdo it. After three rejected offers [of lounge access by a specific passenger], we will no longer make the offer … This is real. This is not something for the future. This is already happening on the ground in Munich.”

Birlenbach said 2017 is viewed as “the year of digitalization within Lufthansa Group.” Using advanced analytics is a “mega-trend” in business that Lufthansa wants to get ahead of, she added.

“There are many opportunities in terms of interaction with customers,” Birlenbach said. “We can improve profit margins by having additional revenue sources … We believe that if the air transport itself is rather exchangeable [from airline to airline], we need to differentiate in other services.”

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