1. 3rd LUFTHANSA
CASE
CHALLENGE
Team Name: FADED FLAME
Campus: Indian Institute of Management, Kozhikode
Members: Arnab Guha Mallik (8943994677)| a.g.m.xaverian@gmail.com
Anshul Kumar (8086087963) | anshulk15@iimk.ac.in
Abhisek Paul (8943707444) | abhisekp15@iimk.ac.in

2. Advertising, PR and online chat
The actual journey; service, information
communication, check-in process, in flight experience
What it is?
Using ENGAGEMENTS to Stand Out
from rest of the Consideration Set
 The Active Evaluation could be the point
where if a brand fails to make a
connection with the consumer at a
touch point, they will turn to a
competitor instead.
 We can take into account the important
post-purchase experience and identify
the role of touch points at each stage
 Each touch points has a potential and
hence serves as a point of engagement
for us.
Adapted from McKinsey
Traditionally, the consumer journey was
mapped as a linear series of stages. With the
new loop model, we can take into account the
important post-purchase experience and
identify the role of touch-points at each stage
modified as Brand engagements for Lufthansa.
Create magic moments from touch points/ Engagements at
every stage in the loop journey in order to earn customer’s
loyalty and advocacy, building a successful brand.
Earn customer loyalty by providing a reliable and valued
service, something different to competitors based on
proper communication and proper loyalty incentives
THE CONSUMER JOURNEY LOOP

3. Revamped Loyalty: Miles & MoreSocial Media Strategy
“Network Miles” Program
Platform: Facebook and Twitter
This initiative will be a social loyalty program that will
enable customers and fans to get rewards for
promotional actions such as sharing a review of the
airline or tweeting a deal.
Socially Others
“Invite only “Network Miles” Program”
New topics will be introduced each week, with
members receiving an email inviting them to take
part in the specified discussion and/or survey
“Win a Plane Contest”
Capturing the football frenzy in Germany to generate
awareness and reach out to the masses
“Child’s Delight”
A perfect communication strategy aimed
towards both parents and children which
captures the emotional attachment to one’s
offspring
Pumping more miles
“Additional Miles”
Receiving more miles on a pre specified route
“Gifting Miles”
Gifting miles; to be redeemed by the receiver to
choose any gift of his choice
“e-Tributes”
Targeting the e-space to enter with e- gift cards
including electronic discount and gift coupons
“Virtual Cash”
Redeeming mile points for virtual cash on zynga
or facebook

4. Lufthansa Airlines needs to modify its business models to
exploit the growth of mobility, and mobility-enabled
personalized services.
Move towards Mobile Advance
Offering smart, mobility-enabled, personalized services and
products can generate new revenues
Our suggested “Mobility Advance” promises to transform how
Lufthansa interact with passengers using a range of services
and smart solutions at various touch points along their
journey, delivering real-time, relevant, and value-added
information.
Airline Mobility Evolution
New Process Innovations are possible from Mobility Advance
Using Mobility advance, Lufthansa can benefit in the following
ways
Shared ramp management—Real-time information such as gate
changes, leading to a reduction in aircraft turnaround times.
Innovative asset management—Smartphone solutions can provide ramp workers with up-to-date
information required for their specific task.
Workforce management- The dispersed Lufthansa crew can access real-time information from flight
crews to handle passenger requests (such as flight delays) more efficiently.
Airport footprint—Smartphone capabilities will also allow Lufthansa to reduce its airport footprints
(personnel, counters, kiosks, real estate, and more) thereby saving on money

5. Print-Ads made by Faded Flame

6. Complaint redressal through FB, twitter and
Google hangout: Invite only network miles
program
Gifting
miles
Flexi
miles
A significant portion of the consumer journey is made up of post-purchases
experiences, so it is vital to build these experiences around what matters to the
consumer; MOBILITY ADVANCE enhances the customer engagements. Also leads
to process innovations and more revenues as discussed in the doc
Consumer Loop Journey
The main factors driving us when we
thought about the innovations/
changes in the services for the existing
customer base and for new ones were
• Engagement
• Customer Service
• Loyalty
Which ultimately leads to revenues
and hence can be monetized
The slide shows how the ideas
suggested by us fall within the
consumer loop journey
Social Media Strategies, Win A Plane
Competition, Sponsorship help in
Brand engagement and generates PR
The suggestions for the miles and more
program only enhance the flexibility of
the loyalty program and makes it more
customer intimate . Focus mainly on
premium customers as they drive
major revenue

7. PREMIUM TRAFFIC GROWTH BY ROUTE
Routes Traffic Share of
Total
Premium:
Premium Traffic Growth Economy Traffic Growth
Revenues May 12
vs.May 11
YTD ‘12
vs.YTD ‘11
May 12
vsMay 11.
YTD ‘12 vs.
YTD ‘011
Africa - Middle
East
1.40% 0.90% 17.00% 24.80% 24.40% 28.70%
Africa - SW
Pacific
0.00% 0.00% -33.30% 2.90% -31.6% -4.80%
c- America-
s.america
0.30% 0.20% 24.90% 23.80% 35.90% 40.40%
Europe - Far
East
9.30% 14.70% 2.40% 6.30% 7.60% 8.50%
Europe -
Middle East
5.10% 5.50% 5.20% 9.30% 10.20% 11.80%
Europe - SW
Pacific
0.10% 0.20% -12.00% -17.3% 11.50% -10.00%
Within N-
America
1.10% 0.30% 18.40% 11.40% 6.80% 3.60%
Within SW
Pacific
0.20% 0.10% -10.10% -8.60% 3.60% 1.50%
North Atlantic 17.70% 27.70% -3.80% 0.60% -0.80% 1.40%
N America-C
America
5.30% 1.80% 1.50% 0.20% -1.40% -1.30%
N America - S
America
2.80% 3.50% 4.80% 6.80% 8.50% 8.10%
Far east –SW
pacific
1.70% 2.30% 1.00% 3.80% 2.00% 6.80%
North and Mid
Pacific
6.30% 13.20% 8.60% 9.50% 7.40% 7.60%
Within Europe 21.90% 6.00% -4.60% -0.40% 2.90% 5.80%
Total
International
100.00% 100.00% 1.70% 4.90% 5.40% 7.10%
Region Rout
e/Ma
rket
level
Mark
et
Natio
nal
level
Nation
al
Supra-
nation
al
level
Supra-
national
Short
-haul
Long-
haul
Short
-haul
Long-
haul
Short-
haul
Long-
haul
Intra N
America
-1.5 -1.4 -0.9 -0.8 -0.7 -0.6
Intra
Europe
-2.0 -2.0 -1.2 -1.1 -0.9 -0.8
Intra-
Asia
-1.5 -1.3 -0.8 -0.8 -0.6 -0.6
Intra
Sub-
Saharan
Africa
-0.9 -0.8 -0.5 -0.5 -0.4 -0.4
Intra S
America
-1.9 -1.8 -1.1 -1.0 -0.8 -0.8
Trans-
Atlantic
-1.9 -1.7 -1.1 -1.0 -0.8 -0.7
Trans-
Pacific
-0.9 -0.8 -0.5 -0.5 -0.4 -0.4
Europe-
Asia
-1.4 -1.3 -0.8 -0.7 -0.6 -0.5
Strategy to identify in order
to increase airlines
frequency in certain routes

8. It is clear that the majority of the premium customers of Lufthansa Airlines are from North America, Asia/Pacific
and Europe. The routes highlighted in Table 1 should be targeted for increasing the number of flights because of
2 reasons:
1) The premium traffic growth rate is the highest on those routes as compared to the other routes.
2) The price elasticity of demand is also less than or equal to 0.6 as shown in Table 2. So, they are less sensitive
to ticket prices
Phase 1 : In phase 1 of roll-out of the introduction of more number of flights, the targeted routes should be the
routes (obtained from Table 1) and the corresponding levels (obtained from Table 2) where the price elasticity is
low (less than 0.6).
Phase 2 : In phase 2, the targeted routes with price elasticity levels between 0.6 and 0.9 should be considered
for roll-out.
Routes like intra-Asia, intra-Europe and intra-Africa should not be considered for the first 2 phases of roll out
because they form only a small chunk of the premium customers (although in Africa, the price sensitivity is
quite low).

9. Estimating favourable market revenue potential
europe 46.1%
north america 20.5%
asia/pacific 19.8%
total percentage share of targeted routes 86.4%
Normal revenue projections
total traffic revenues for year 2011 (EUR millions) 20534
conservative estimate of growth in revenues
(includes growth of volume, price mix currency
effects) 10%
estimated revenues for year 2012 (EUR millions) 22587.4
considering availability/suitability of these routes
for our implementation 75.0%
Revenue share of favorable route for
implementation (as a % of total revenues) 64.8%
increasing the number of airlines on this targeted
route 10%
total estimated revenues for year 2012 (EUR
millions) 24051.06
Destination % of revenue Freuencies Ratio
Europe 46.1 9819 0.00469
North Atlantic 20.5 3442 0.00596
South
America 4.8 359 0.01337
Asia/Pacific 19.8 786 0.02519
Africa 4.3 253 0.01700
Middle East 4.5 165 0.02727
estimated revenue generated by premium segment
Premium share of intercontinental traffic
revenue for Lufthansa 50.40%
Estimated Revenue generated by
premium segment customers plying
favourable route for implementation (EUR
million) 12121.74
FINANCIAL CALCULATIONS: Revenues to be generated from increased air transport
and how premium customers are the most important segment

10. • The three most important routes for
Lufthansa are Europe, North
America and Asia/Pacific, which
together constitute 86.4% of the
total revenue.
• Here we have taken a conservative
estimate of growth in revenues
(includes growth of volume, price
mix currency effects) of 10%.
• Then we have analysed the impact
of increasing the number of flights
plying on these routes by 10%.
• Again taking a further conservative
estimate of 75%
availability/suitability of these
routes for our implementation, we
get total estimated revenues of
12.122 EUR billions, considering the
premium share of 50.4% of the total
intercontinental traffic.
In these financial analysis, we are trying to analyse the
relative importance of different routes in terms of revenues
earned and also tried to map it with the price elasticity of
the premium customers in different parts of the world, so
as to give an idea of the most profitable target routes for
Lufthansa for introduction of more number of flights.

11. THANK YOU