Uh Oh: Lufthansa Group Centralizing Airline Management To Boost Profits

Intercontinental Singapore rebranding and leaving IHG end of 2025. What’s your take on this trend of corporate rebranding among the big hotel chains?

I am Swiss, living in Switzerland. The press here is furious about the change, but indeed I don’t ser much change for the future. Lufthansa Group is well aware they are earning good revenue in Switzerland, accordingly they will schedule flights for the future

Does the central management organize things like seat installation on new aircraft? The future looks great (for KLMAF and BAEC).

I will trust them if their first order of business is to rip out the failed Allegris product and put in existing reverse-herringbone seats.

So controlling German nazi swines are trying to dominate and control again ? Well, well, it only took 80 years for the return.

LOLhansa

Surely, there is a lot to be said for putting all of the corporate nutcases into one central institution? …. 🙂

I agree, Swiss will schedule flights for the future. This is 100% guaranteed, regardless of whether scheduling is out of Zurich or Frankfurt.

Of course the current model of splitting everything into 5 business units makes zero sense (I'd go as far as saying that even keeping separate brands alive is a massive waste of money). The problem is that LH plans to transfer control to the least efficient of the business units in question.

LH management is fed up with the other group airlines making them look bad, so they want to reduce the customer experience at the other airlines to the LH level.
Then they won't get any customer feedback along the lines of "LH, why can't you do it like Swiss does"
Fewer complaints => "better customer satisfaction" !

German groups are notorious for this - as are some American ones.

Well the new CEO of SWISS is German of course. His COO is a Swiss man, and perhaps fittingly both he and the CEO were pilots for Lufthansa Group, and you may recall that Carsten Spohr himself was a pilot as well.

However, a Swiss and Belgian man, the former COO of SWISS is now the 2nd in charge at Lufthansa with Mr. Spohr. As such there is a balance of Swiss nationality representation in the executive management boards of both Frankfurt and Zurich.

If Step #1 isn't "Fire Carsten Spohr" then all the consolidation in the world won't do a thing to goose profits.

Carsten is really looking at how to cut as many costs as possible because he really needs that performance bonus to bail his wife out of the 10+ year sentence that awaits her (she ran over a pedestrian in Italy and killed her).

It's OK to move certain back office duties to one location like payroll, A/P, IT, frequent flier programs, airline alliances, purchasing (leverage in bulk purchases), etc. This can extent to the purchase of aircraft and service contracts as well. In so many words, you need economy of scale.
However, each airline needs to maintain its own flavor and style. Each airline president has responsibility and authority over the hard and soft items the PAX comes in contact with. The customer needs the sensation he/she is dealing with their favorite airline. A difficult balance and a constant tug a war between the holding company (MBAs) and the individual subsidiaries (Marketing)
Alaska and Hawaiian are going thru this situation as we speak. How does Alaska eliminate the Hawaiian name without killing the "aloha" sensation of the islands. Tricky balance!!

Just curious how KL & AF handle their 'marriage' and to what degree it is 'open' ...
Maybe Lufty bit of more than it can chew, kinda like herding cats ?

Indeed.... I'm am sooo reassured to see the 'inmates' running the 'asylum' !
... lol

She’ll have to be extradited first, as she and her daughter immediately fled Sardinia after the accident.

Also, what’s up with Vivian’s nepo job with Lufthansa? German corporate governance really is a disgrace.

Meaning what? SWISS is still screwed. Austrian too. The only airline this arrangement might improve is the ghastly Brussels.

I’m surprised that the most obvious point is not mentioned: AI
The complete planning process of routes of so many airlines will not be on paper. So computer are already in play.
If you want to optimize the planning, react quickly on changing demands, you need ONE place where all information will be captured.
They could choose any location, but Frankfurt it will be. I believe the number of people required will be drastically lower as actual and there is no claim: Ai kills jobs.

Further it is just the first step. There are so many more steps possible to combine the airlines. Why does every airline need their own board cabine? I believe LH has in China a base, why does they only work on LH flights and war not shared with LX? I know worker councils will not like it, but I’m just mention this

Are the corporate heavies being forced to relocate from Köln to the amalgamated operations centre, or will they be allowed to remain in their ivory tower, far away from the vulgar unpleasantries of day-to-day management?

Not sure what Spohr means by that. To my knowledge Network Planning and Revenue management already are at least coordinated (especially in RM).
About 15 years ago, before Eurowings and Lufthansa City and all that, they optimized their entire LH short-haul network as a whole, but they later moved to a hub based model because of the reduction in complexity that delivered. Managing a group of airlines will at very least be very challenging.

There is no meaningful function in Cologne and there hasn‘t been in the last 30 years.

Here's a thought to brighten your day. A LH FA on a recent flight told me that there will ba big to-do next year to celebrate their 100th anny. Many employees hoping he takes the opportunity to retire at that point. A regular two-for-one. We can hope.

The problem of Lufthansa is: Trade Unions.
Without them, there is logical need having Lufthansa Airlines, Air Dolomiti, Lufthansa City, Lufthansa Cityline, Discover Airlines, Eurowings and Eurowings Europe alone in the German market.
I guess it's mainly the pilots in VC who don't understand the mess they are forcing LH into.

The reporting of the incident in question indicates that she fainted on the spot when confronted with the sight of the victim. The investigation of the local authorities is ongoing of course, and as such none of us can say what fault lies with her in the circumstances of this tragedy. Through her Italian attorney Ms Spohr has expressed her deepest condolences.

Ben you couldn't be more right...Uh Oh !

Germany is a failing state. Ask any German. They are embarrassed by their trains, failing.

Even Switzerland won't allow German trains into Zurich because they are always late and disturbs the Swiss trains schedules which are on time.