Lufthansa to offer business-class upgrades with economy bookings

[FRANKFURT] Deutsche Lufthansa AG plans to entice passengers to pay for business-class upgrades on European routes by offering deals when people book economy class tickets and then again when they check in.

Lufthansa will limit the strategy to people most likely to respond favorably by using customization technology developed by its own data and computer experts over the past six months, Marcus Casey, who heads the project, said in an interview.

The same system will allow Europe's second-biggest airline to offer paid-for lounge access to customers with promising profiles and time to kill, potentially just as they're passing the door. The technology will also help Lufthansa streamline in- cabin offerings to the preferences of its regular fliers.

"We want to give clients the feeling of being a regular, like going to your favorite pub," Mr Casey said. "The customer should feel that we know his favored food and drink, his favorite music already waiting on the play-list, and the seat adjusted to the settings he likes."

Lufthansa has previously offered short-haul passengers upgrades from economy to business only in exchange for air miles. Under the new system, introduced yesterday for flights departing from October, clients will be invited to step up a class in the e-mail confirming their booking. Later approaches will come via Lufthansa's web page and again with check-in confirmation, potentially at the airport on the day of travel.

On long-haul flights, Cologne-based Lufthansa currently permits cash upgrades from coach to premium economy, with a move up from the cheapest class to business permissible only using air miles. The carrier's Swiss and Austrian units, though, are trialling a bid-based system where coach customers can offer whatever they're willing to pay for a premium seat, and that system may later be extended to the main-brand airline.

Lufthansa is tapping the latest technology to lift revenue as the growth of low-cost airlines in Europe and long-haul Gulf carriers undermines its ability to control pricing and encourages people to view flying as a commodity product.

The roll-out coincides with the introduction of three different service packages for European coach-class flights departing from Oct 1. An economy-light fare permits hand- luggage only with zero flight flexibility, while the classic offering allows one checked item and the right to rebook for a fee, with the flex ticket including rebooking at no extra cost.

British Airways started giving iPads to cabin crew in 2011 as part of its "Know Me" initiative to serve its top clients in a more personal manner, drawing together information from different sources to anticipate customer needs, while American Airlines and Air France's KLM arm help passengers navigate their hubs by beaming interactive maps to mobile devices.

Ryanair Holding Plc has established a 200-strong team to customize its sales process, using supermarket-style methods to distinguish between social categories and offer targeted flight promotions. The discount carrier's clients spend one euro on ancillary services for every 3 euros spent on tickets.

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