Lufthansa is adopting a new policy for ticket flexibility that I can’t help but find to be a little questionable, as flagged by FrankfurtFlyer…
In this post:
Lufthansa makes flexible tickets inflexible with new fees
Generally when you book an airline ticket, there are many tiers of fares you can book, which offer varying levels of flexibility.
While it’s often outrageously expensive, airlines typically provide the option to book a flexible fare, which is refundable to the original form of payment up until close to departure. Sometimes airlines will have a very small administrative fee to cancel these tickets, but the idea is that these tickets offer flexibility.
For example, take a “First Flex” fare from Munich (MUC) to Chicago (ORD), where you’ll see that under “Refundability” it shows “Allowed,” so the ticket can be refunded at no cost.
However, due to a new policy, Lufthansa Group airlines are now charging significant fees to refund the most flexible tickets in select regions. This policy applies exclusively to flights that are to & from Asia Pacific (excluding China, Japan, Malaysia, and Singapore), along with flights to South Africa, Mauritius, and the Seychelles. So as you can see, the rollout of this is limited so far.
If you’re looking for a cash refund on the most expensive (flexible) tickets in the above regions, you’ll now pay the following:
- Economy tickets have a €400 fee
- Premium economy tickets have a €700 fee
- Business class tickets have a €1,000 fee
- First class tickets have a €1,500 fee
What’s Lufthansa’s motive for this policy change?
It goes without saying that airlines don’t actually want customers to refund their tickets for cash. At the same time, the whole reason for offering tiered fares is to provide incremental perks in exchange for a higher ticket price.
Ticket flexibility is something that people value, especially business travelers, and Lufthansa is countering the trend by not offering flexible tickets. For example, if a corporation needs to book a ticket for an outside contractor but isn’t 100% sure if the trip will happen, then a large cash fee to refund could be a big deterrent to book with that airline (since you don’t value that traveler being able to use the ticket value as a credit toward the cost of a future journey).
It’s interesting to note the markets that this is initially being implemented in, as these are regions that aren’t part of any major joint ventures. That’s often how airlines test new things on long haul routes, before extending it further.
So, what’s the logic here, especially with Lufthansa doing this while competitors don’t? I have to imagine that this is a trial, and that Lufthansa will likely be considering several factors:
- Will a fee to refund tickets greatly decrease demand for flexible fares? If so, will it cause people to book travel on other airlines, or just to choose a different type of fare?
- Is this new policy intended to address concerns over people booking refundable tickets in order to “hold” seats (for one reason or another), with people consistently canceling at the last minute?
Fully redefining the concept of flexible tickets doesn’t set a great precedent. Higher fares are almost like tiered insurance policies, where the cancelation “co-pay” decreases as you buy more expensive tickets. However, it has typically been that the most expensive fares give you no “co-pay,” hence them being branded as “flexible,” rather than as “slightly cheaper to cancel than other fares.”
Bottom line
Lufthansa is taking the concept of flexible tickets to a new low, with a €400-1,500 fee to cancel these tickets and receive a refund. This is initially being implemented in select markets that don’t belong to any of the major joint ventures, so I have to imagine that the airline is looking to eventually expand this further.
One wonders to what extent customers will be interested in paying a big premium for a top-tier fare that doesn’t even let you refund your ticket for free.
What do you make of Lufthansa’s new approach to ticket flexibility?
Now that’s what I call Luft-kafka!
Was genau stimmt eigentlich nicht mit dir?
Just another example that airlines operate in strange market where certain types of demand are completely inelastic. Selling refundable fares that come with $1k+ fees is just exploiting this fact. I assume the audience for this abuse is mainly composed of OPM flyers with VeRY IMpOrTant JObS like making slide decks.
Ben, think a bit around the corner. Emirates, Qatar and Etihad fly frequently to these destinations. cause of the situation in the Middle East, many people buy a lufthansa ticket as backup. If airspace opens and the M3 will float the market with cheap tickets everyone would cancel his LH ticket to buy an e.g. emirates ticket. Lufthansa simply does not want that. So that's a way to make that fair for them. I think one year ahead they will return to the normal rules.
That's exactly what a friend working for LH is saying.
They have a lot of backup bookings for ME airlines and people just cancel their LH flights, if it looks like their original ME airline flight will take place.
The problem I see with the LH Group, once the notice that people still book flex tickets like this, they will just keep it. Of course, because the customer wants this
the thing is that you have other alternatives: KLM picks no fees in there business flex. So I think LH don't care at that moment cause these in the future cancelt bookings costs them more at current fuel prices as if these person do not book at all. In normal times you can't do this cause BA, KLM, etc. have real full flex tickets.
I wonder if this is related to the Middle East situation regarding Iran. I guess many people buy flex tickets and cancel if Emirates and Qatar can fly.
A bit surprised that you do not explore this possibility in the post.
The intention here is quite simple: The markets affected by this policy are markets where European Airlines have seen a massive increase in demand due to the closure of the hubs in the Middle East. Now, with the big Middle Eastern carriers slowly resuming their flight operations, LH is worried that a lot of people will book a LH Flex ticket as a backup, which they will cancel last minute to take a cheaper flight...
The intention here is quite simple: The markets affected by this policy are markets where European Airlines have seen a massive increase in demand due to the closure of the hubs in the Middle East. Now, with the big Middle Eastern carriers slowly resuming their flight operations, LH is worried that a lot of people will book a LH Flex ticket as a backup, which they will cancel last minute to take a cheaper flight with one of the ME3 instead.
With these high cancellation fees, LH is saying that you either book the cheap option with one of the ME3 and take the risk that your flight gets cancelled, or you take us as the safe but expensive option, but we are not your back-up solution. It is ironic that LH considers itself as the save solution with all these strikes going on at the moment.
Just another example of Germany, and German businesses, being on the wrong side of history
Standby for unintended consequences. Clearly they want to prevent refunding. I'd assume that points travellers are booking these, then cancelling at just the right time, so they can book with points when the space is released. Does LH really believe they're missing out on real cash buyers because of this practice? Is it actually costing them money?
Good luck with your brilliant solution guys. In the call centre alone, LH will blow all their gains,...
Standby for unintended consequences. Clearly they want to prevent refunding. I'd assume that points travellers are booking these, then cancelling at just the right time, so they can book with points when the space is released. Does LH really believe they're missing out on real cash buyers because of this practice? Is it actually costing them money?
Good luck with your brilliant solution guys. In the call centre alone, LH will blow all their gains, when people flood them with complaints about refundable-not-refundable fares they bought.
Probably they want to create a few other subsidiaries: one that offers flexible-flexible fares, and one with not-really-flexible fares.
Who even travels with lufthansa? Never ever heard anyone traveled with lufthansa.
Trash airline
As a point of fact …. LH is rated No: 15 in the World Rankings …. your preference is rated in which position? Do tell Jake old bean, give us all a laugh, yes?
As another point of fact, I have no preference for LH, but I do question nonsensical comments. Ben is sure to thank you for your click.
And brainwashed morons still believes the propaganda that EU has better consumer protections.
L ragebait