Lufthansa Group is planning some major changes to how it does business, in order to both increase profitability and improve customer satisfaction. That combination always makes me a bit skeptical, especially when it’s coming from Lufthansa Group.
In this post:
Lufthansa’s controversial “Matrix Next Level” strategy
Europe has three major global airline groups. One of those is Lufthansa Group, which includes Lufthansa, SWISS, Austrian, Brussels, ITA, Eurowings, Discover, etc. While the airline group is based in Frankfurt, the individual airlines have a fair bit of autonomy in terms of their strategy.
Lufthansa Group CEO Carsten Spohr is looking to change that, in a project that’s called “Matrix Next Level” (lol?), which could be implemented as of early 2026. German publication Handelsblatt reports on an internal memo making its way around Lufthansa Group airlines, whereby Lufthansa lays out its plan to increasingly control decisions for the entire group from Frankfurt.
This is particularly controversial at SWISS, which is one of the group’s best performing airlines, as a fair amount of control of the airline has been left to management in Zurich. The intent is increasingly for strategic decision to be made by Lufthansa in Frankfurt, including for functions like route planning, sales, and loyalty. Meanwhile the inflight experience would be left within the control of the individual airlines. Spohr believes that this realignment is needed in order to improve profitability and customer satisfaction.
Obviously the individual airlines largely aren’t too jazzed about this concept. For example, a SWISS spokesperson has confirmed that “the Lufthansa Group is reviewing its organizational structure together with the Group airlines,” and that it’s examining “in which areas we can benefit even more from the synergies of a strong group”.
But a spokesperson also emphasized the importance for independence, saying “it is important for us to say that Swiss will remain a strong airline,” and that “in future, it should continue to be able to make its own decisions about its services.”
My take on Lufthansa Group’s management strategy shift
In theory, there’s nothing wrong with centralizing more management functions within an airline group, given the potential synergies. That being said, I have a few thoughts…
First of all, I’m always a little skeptical when the claimed motivation for something is to both increase profits and customer satisfaction. It’s rare that those two things go hand-in-hand, at least at an airline like Lufthansa.
Second of all, purely in terms of track record, I can’t help but be a little skeptical of centralizing more functions in Frankfurt. It honestly amazes me that we haven’t seen an overhaul of Lufthansa Group management, given the repeated shortcomings we’ve seen over the years.
Based on what record is it believed that decisions could be better made in Frankfurt than at other bases? For example, the reason that SWISS is having to install a 3,000-pound weight on its A330s is because of Lufthansa Group management, and not because of SWISS management.
For that matter, so many functions are already centralized with Lufthansa Group. This includes fleet planning (Lufthansa Group orders planes centrally), loyalty (Miles & More is one program for member airlines), and even route planning (so much planning happens as part of joint ventures, and there’s already a lot of coordination).
So I can’t help but but be a bit worried that if even more functions are controlled by Lufthansa, that just can’t be good for passengers. Anyway, we’ll see how this all plays out…
Bottom line
Lufthansa Group plans to centralize more management functions in Frankfurt as of early 2026. The idea is to leave less control with individual airlines of the group, like SWISS, and increasingly have decisions made at the airline group level.
In theory, there are no doubt synergies there, and I could see upside. The challenge is that it’s hard to have much faith in Lufthansa Group management, given its track record with so many things in recent years.
While the claim is that the goal is to increase profits and customer satisfaction, I would speculate that this development might help more with one of those than the other.
What do you make of Lufthansa Group’s management centralization plans?
If staff is going to be cut it honestly makes sense to cut duplicative administration positions rather than, you know, the frontline employees that actually operate the flights. That being said, I can absolutely see how this would be bad for the individual airlines even if they do retain control over their inflight experience (for now). But who knows, maybe it also could cause such a backlash that a house-cleaning happens in the C-suite, but...
If staff is going to be cut it honestly makes sense to cut duplicative administration positions rather than, you know, the frontline employees that actually operate the flights. That being said, I can absolutely see how this would be bad for the individual airlines even if they do retain control over their inflight experience (for now). But who knows, maybe it also could cause such a backlash that a house-cleaning happens in the C-suite, but of course things would have to get worse before anything like that would make improvements.
At least in the business unites I have insights, Frankfurt's management is the most outdated, old-fashioned and non-innovative in the whole group. I'm seriously worried about Matrix Next Level - The only airline making losses in a good market environment should get more responsibilities in the group? The excessive self-confidence in Frankfurt is just (matrix) next level....
Fifteen years ago, the European carriers way ahead of the US carriers. Now I would avoid them. The lounge offerings are pathetic, the hard product is inferior compared to US carriers baring a handful of exceptions, the soft product at best is on par.
So "customer service" at the "lesser" LH-group carriers (Swiss and Austrian) will become like how a bull "services" a cow.
Good to know.
Now, each subsidiary will be Spohr-nicated in the same manner with the same efficiency.
"Meanwhile the inflight experience would be left within the control of the individual airlines."
For now.
This is just the thin end of the wedge. Smart money is on five years tops before LH controls ever facet of the service offerings, timing of same, irregular ops policies, food budgets and menus, lounge requirements, all of it.
Almost definitely won't be better for customer experience. You already see how central planning has lead to a subpar first product being rolled out across LH + LX. Having said that - it's the obvious next move. Lufthansa Group is basically "Europe Airways" and I imagine it'll start to look increasingly like that. It's the obvious move. Essentially a continental carrier which has some localized branding/cultural elements (food, lounge style etc) within each "hub".
So massive layoffs are coming!
Consolidation of management makes a lot of sense of course, the way most European airline groups work is inefficient and expensive. Problem is that LHG is set on consolidating it into the least competent of its branches. Matters of product should be consolidated in Zürich/Vienna and FRA should only handle sales, admin etc.
All things being equal, this seems like a great idea and frankly long, long overdue.
LH Group is super fragmented and is wasting a lot of money on separate IT systems, duplicate functions in FRA, Vienna, Zurich etc. Personally, I'd rather have them spend more money on planes and cabin staff instead of seven different SAP contracts.
Would it be better if someone moderately competent was put in charge of customer experience? Sure. But in...
All things being equal, this seems like a great idea and frankly long, long overdue.
LH Group is super fragmented and is wasting a lot of money on separate IT systems, duplicate functions in FRA, Vienna, Zurich etc. Personally, I'd rather have them spend more money on planes and cabin staff instead of seven different SAP contracts.
Would it be better if someone moderately competent was put in charge of customer experience? Sure. But in the meantime, if they tackle bread and butter stuff like this, by all means go ahead.
Thank you, Carsten Spohr's mom.
LOL Carsten Spohr's mother would never write something that kind about his operation. People talk lol
BOHICA. "Enhancements" ahead.
Swiss HQ is not in Zurich but in Basel
and LHG officially in Cologne :-)
Did they really say it will be centralized in Frankfurt? Wouldn't it make more sense to centralize it in Zurich, so that the SWISS management can try to get LH-Group out of the fiasco it will be stuck in until Allegris can be replaced?
As far as I know, yes Revenue Management is being centralised (this project has been going on for years, by the way), but in Zurich, not Frankfurt
I thought for a sec today was Apr-1.
Customer satisfaction directed from LH's existing management?
OMG.
I worry about what this will mean for Austrian Airlines. They are by far my favourite Lufthansa Group airline with consistent service and a great soft product but this change might impact that.
I’m sure customer service and satisfaction was at the top of their minds when they came up with this plan. NOT!
Why one of the two? I think it's entirely likely that the move will harm both profits and customer satisfaction!
Everyone should centralize and shrink bloated management ranks.
Most corporate managers are just money sucking leaches that could easily be reduced from 3 to 1.
the "children" are smarter than their parent
They should centralize in Zurich
Perfect example on micro level what happens when Switzerland accepts EU treaties.
Why does Carsten Spohr still have a job?
Because Spohr is another example of some people failing upwards as long as you look a certain way and have the right contacts.
Sounds like a worse deal for passengers.