Luxair – Regionale Fluggesellschaft Im Kompetitiven Umfeld

Luxair – Regionale Fluggesellschaft im kompetitiven Umfeld

Gastvortrag am Lehrstuhl für Marketing & Handel, Universität Trier

Alberto O. Kunkel , MBA (Vize-Generaldirektor Tour Operating und Sales & Marketing)

Dr. Martin Jager (Direct Sales & CRM Manager)

29. Januar 2014

Agenda

1. LuxairGroup: Passionate – Caring – Responsible

2. Luxair Luxembourg Airlines: Marketing Management • Market & Competitive Environment • Marketing Strategy & Vision • Marketing-Mix • Retention & Customer Loyalty 3. eCommerce Future – Mobile Strategy & eServices

2 About LuxairGroup

A major regional player in ‘Greater Luxembourg’ area, with its primary focus on: Comfort, service quality & safety, setting the benchmark as ‘carrier of choice’ Turnover 446.7 (mio EUR)* Staff 2,309* Founded 1961 Activities Luxair Luxembourg Airlines LuxairTours LuxairCARGO LuxairServices *2012

Passionate - Caring - Responsible 3 Structure

Passionate - Caring - Responsible 4 History

• Luxembourg Airlines Company formed 1948 • Reorganization and name change to ‘Luxair - 1961 Société Luxembourgeoise de Navigation Aérienne’ • Launch of commercial activities, LUX-Paris and LUX-Frankfurt with Fokker F27. 1962 Sustained and fast growth. • First Holiday flights to Nice and Palma 1964 • LuxairTours launched 1968 • First freight warehouse 1968 • New Cargocenter built 1996 • Repositioning - ‘Building a New Airline’ 2006 • Economic crisis 2008

Passionate - Caring - Responsible 5 Executive Committee

Adrien Ney President and Chief Executive Officer

Alberto O. Kunkel Martin Isler Executive Vice-President Executive Vice-President Tour Operating, Airline Sales&Marketing

Laurent Jossart Executive Vice-President Finance

Thomas Czypulowski Michel Folmer Senior Vice-President General Secretary Information Systems

Passionate - Caring - Responsible 6 Key facts

• Passengers 1,374,810 • Revenue p km (thousands) 1,660 • Seat Load Factor 73.4% • Passengers at Luxembourg Airport 1,919,880 • Flight hours 37,291 • Meals served 1,689,000 • Freight handled (tons) 638,068 • Staff (average 2012) 2,309

Passionate - Caring - Responsible 7 • LuxairTours – Quality Sunshine Holidays • Happy Summer – Best Value Beach Holidays for Families • Metropolis – European City Breacks • Discoveries – Cruises and Circuits • Excellence – High-Quality Packages

• State-of-the art Cargocenter • 293,000 m2 cargo infrastructure • Annual capacity of more than 1 million tons

• 1,919,880 Passengers assisted • 1,689,000 Meals served • 37,291 aircraft movements, Management of +500 vehicles

Passionate - Caring - Responsible 8 Agenda

1. LuxairGroup: Passionate – Caring – Responsible

9 Market & Competitive Environment

• Regional Carrier  Adapt to industry standards  INDUSTRY • European Network through global systems • Economies of Scale  Network & Codeshare Strategy

• Small Catchment Area  Differentiation to keep regional • Regional Complexity  MARKET advantage through CRM, • Challenge of Direct Customer eServices and customer focus Reach  Focus on services related to • Low Cost  MARKET strategic targets • Cost Efficiency DEVELOPMENT  Competitive & dynamic offer • Dynamic, Permanent Change  Cost reduction • Central Industry Standards  Integration and management of  TECHNOLOGY • Mobility state-of the art systems & tools • Early Adopter • Personalisation  Customer Retention through CRM, • Global Technology  E-COMMERCE eServices & state-of-the art online • Key Industry Driver and mobile presence • Complexity • International & Airline  Adopt to industry standards, full  REGULATIONS • EU Legislation (passenger rights, alignment with legislation consumer protection, etc.)

Passionate - Caring - Responsible 10 Network & Codeshare Strategy

Network: 43 Destinations – 18 operated by Luxair, 25 Codeshare Destinations

Paris Brindisi, Catania, Genoa, Lamezia, Milan, Naples, Palermo, Rome, Turin, Venice, Verona Bucharest, Budapest, Vienna Cracow, Warsaw Athens, Berlin, Bilbao, Bologna, Bremen, Dresden, Frankfurt, Hamburg, Helsinki, Leipzig, Lisbon, Munich, Sofia, Stockholm, Venice Istanbul Passionate - Caring - Responsible 11 Cooperation Example: From Luxembourg via Munich to the World – 3 Daily Flights to the Hub Munich

Munich Cooperation Example with Lufthansa: From Luxembourg via Munich to the World

Passionate - Caring - Responsible 12 Agenda

1. LuxairGroup: Passionate – Caring – Responsible

13 Luxair Luxembourg Airlines – Fly in Good Company

Reference Carrier of the Greater Region – Connecting the Greater Region to Europe, and Europe to Luxembourg

• Modern fleet founded on highest standards of quality,

comfort and safety 6 Embraer ERJ 145 - 49 seats

• Easily accessible airport with modern infrastructure, incl. Luxair Business Lounge, Business Check-In, Buy Bye 6 Bombardier Q400 - 76 seats Shops

• Same-day-return options 3 Boeing 737-700 - 141 seats • Attractive Fare Structure as of 99€ for Leisure Travellers, maximum Flexibility for Business Customers

2 Boeing 737-800 - 186 seats • Miles & More Bonus Miles on all Services

Passionate - Caring - Responsible 14 Luxembourg Airport – At the Heart of Europe

Our Home Base: Luxembourg Airport

 Modern Airport: Qualitative architectural Concept and innovative Design with Focus on Fast Connections, Comfort & Flexibility

 Service Quality based on Dedicated Luxair Check-In, Service & Ticket Desks, Buy Bye Shops, Luxair Business Lounge, etc.

 Direct Access: Thanks to a highway network right on its doorstep, Luxembourg Airport is easy to access from anywhere in the Greater Region (e.g. less than 45 km from Trier via A1 Highway)

Passionate - Caring - Responsible 15 Luxair Full Service Carrier Strategy

LUXAIR as FULL SERVICE CARRIER LUXAIR Customer New Customer Strategy New Travel Experience

• Adapt our Services to our • Mobility and flexibilty for customers expectations our clients • Enhance our Service • Save time and access to ranges and quality improved comfort level • Anticipate market trends • Luxair as preferred travel • Be qualitative and CRM choice due to customized competitive offers & services in line with personal demand

Best Value for Money Best Feeling for Money

DIFFERENTIATION – FOCUS ON TARGETS – CUSTOMER LOYALTY

16 Agenda

1. LuxairGroup: Passionate – Caring – Responsible

17 How to play the Marketing Mix

PLACE PRODUCT & SERVICE Focus: Direct Sales Web Standardized Products & Services Plus: Corporates & TAs Business Class vs. Economy Class Customer-Orientation

PRICE ALL CUSTOMERS PROMOTION Dynamic Pricing Newsletter Actions Price Differentiation based on CRM Multiple Online Entry Points Flexibility & Service Levels Flyers & Offline Campaigns Image Brochure & Sales Events

Customer Feedback & Behavior will lead to Learning Effects for Future…

Target Options

BUSINESS vs. LEISURE PURPOSE

18 Dynamic Pricing Strategy & Revenue Management

Luxair Dynamic Pricing Strategy & Revenue Management

Dynamic & Simultaneous Pricing to Optimize Profitability based on 1. Capacity & Seat Load Factor, 2. Customer Behaviour & Advance Purchase Time, 3. Route Steering & Booking Class Management

Price Differentiation: Commercial Fare Families based on Fare Rules, Product Features & Flexibility Needs

New Luxair Fare Structure as of September 2013

99€ – 280€* 280€ – 550€* 650€ – 950€* 600€ – 900€* 900€ – 1250€*

* Ø Price Range per Commercial Fare Family: Return Flight, all incl.! Passionate - Caring - Responsible 19 Commercial Fare Families – Fare Rules & Features

FARE RULES Changes & refund not Changes possible, no Changes possible, no Change/Refund Flexible & refundable Flexible & reundable possible refund refund Name Change No No No No No

Changes No 85€ Free 85€ Free

Net Fare Refund No No 100% No 100%

PRODUCT FEATURES Baggage 20 KG 20 KG 20 KG 30 KG 30 KG Allowance Hand Luggage 1x7 KG 1x7 KG 1x7 KG 2x7 KG 2x7 KG

Lounge Access No No No Yes Yes

Business Class No No No Yes Yes Check-In Miles & More 125 Miles 750 Miles 1.250 Miles 1.250 Miles 2.000 Miles (International)

Passionate - Caring - Responsible 20 Attractive Entry Price Strategy from 99€* Return Flight

Focus on Entry Price Level from 99€* Return Flight + “Best Value for Money”

 Entry Price Strategy from 99€* Return Flight for the most beautiful cities in Europe, full Luxair Service included

 Proactive Price Communication and Luxair Special Actions with Focus on Direct Sales Web

 “Best Value for Money” Formula: Attractive Entry Price Structure for Leisure Customers together with Luxair Service Quality Standards

Passionate - Caring - Responsible 21 Product & Service – Luxair Value Proposition

Best Business Schedule & Centrally located airports

Award and Status Miles Price incl. taxes with Miles & More and charges

MyLuxair Online check-in and seat reservation

Baggage Allowance: Complimentary food, drinks & 20 kg (Eco), 30 kg (C-Class) newspapers onboard Hand Luggage: 7 kg (Eco), 2 * 7 kg (C-Class) Business Lounge (C-Class+ M&M Status Members)

Passionate - Caring - Responsible 22 Product & Service – Luxair Business Class

Exclusive advantages – tailor-made for you  Fully flexible and refundable  Baggage allowance of 30 kg and hand luggage of 2 pieces  Valuable 2000 Miles & More Award / Status Miles

Save valuable time  Check-in online and save 20 minutes at the airport  Boarding Pass directly on mobile phone as a 2D barcode  Choose your seat onboard with the eServices free of charge

Travel in complete tranquillity  Dedicated Business Class check-in desk at Luxembourg Airport  Access to Business Lounges at various Airports  Check-in open right up until 30 minutes prior flight departure

More comfort and service quality  A quality onboard service provided by multilingual staff  Delicious Business Class meals, large choice of drinks/wines  Large choice of selected up-to-date newspapers and a choice of 5 magazines

Passionate - Caring - Responsible 23 Place – Focus on Direct Sales Web

Welcome to www.luxair.lu

 Main Website www.luxair.lu in 3 languages, best offers & services, valuable info about the Luxair World

 Sales 2013: Ca. 180,000 Luxair Bookings (Pax), Growth Rate: +29% vs. 2012

 Modern Infrastructure, State-of-the Art Booking Tools, MyLuxair, Newsletter Subscription Options, etc.

 Additional Country Microsites UK Microsite www.luxair.co.uk, DE Microsite www.luxair.de, FR Microsite www.luxair.fr, IT Microsite www.luxair.it

Passionate - Caring - Responsible 24 Place – Social Media

 36,600 Luxair Fans + 23,900 LuxairTours Fans on Facebook (Re-Duplication versus 2012)

 Access to recent Sales Actions & Special Offers, Games & Surveys, City Tips & Events etc.

 Next Step: New Social Media Strategy, Dedicated Community Management with External Agency

Passionate - Caring - Responsible 25 Business Customer Communication – Luxair Business Traveller Newsletter

Luxair Premium Business Newsletter

 CRM-Based Premium Business Newsletter Concept “Luxair Business Traveller News” with 2 Editions / Year

 Objectives: Push Sales Figures with Focus on Business Purpose, Improve Luxair Brand Awareness & Image

 Approach: Proactive Communication of Valuable Insights & Key Product Features, Focus on Quality & Services

 CRM-based Targets: +40k Business Purpose Customers with ca. 50% Full Personalization (like “Dear Mr. Jager”)

Passionate - Caring - Responsible 26 B2B Communication – Luxair Travel Agency Newsletter

Luxair Travel Partner News

 New Travel Agency Newsletter Concept – Multi-Topic B2B Newsletter based on Quarterly Editions

 Objectives: Improve B2B Communication, Push Sales Figures, Inform Travel Agency Partners about Luxair news

 Approach: From Single B2B Mailings to Quarterly Editions … and A Dedicated Luxair TA Extranet in Future

Passionate - Caring - Responsible 27 Leisure Customer Communication – Luxair Leisure Newsletter Subscription

Luxair Online Newsletter Service

 Our Online Newsletter is a very convenient tool, and brings our subscribers a useful mix of information related to our flights, promotions, last minute offers or travel suggestions

 In a nutshell, this is the best way to stay tuned and never miss out our latest offers

 Simply Subscribe via www.luxair.lu !

Passionate - Caring - Responsible 28 Promotion – Luxair Leisure Newsletter Examples with Focus on “Best Value for Money”

Passionate - Caring - Responsible 29 Agenda

1. LuxairGroup: Passionate – Caring – Responsible

30 Luxair as Full Partner of Miles & More – Europe’s largest Frequent Flyer Program

Luxair as Fully Integrated Miles & More Partner

 Register: Become a member free of charge to enjoy multiple benefits  Earn Miles: Hotels, flights & travel, shopping & lifestyle, car rental, etc.  Spend Miles: Flight awards & upgrades, hotels, gifts & presents, etc.

Raise your Status Step by Step – Enjoy more Advantages and Benefits with each Status Level

 Business Lounge Access, Waitlist Priority, higher Baggage Allowance, Guaranteed Seats up to 24 h before Flight, Free Flight Vouchers, etc.

Passionate - Caring - Responsible 31 Miles & More Status Levels

HON Circle Member The Principle of highest Recognition Exquisite Services & Benefits for an Exclusive Circle

Senator Distinguished by Esteem Valuable High-Level Privileges with the Personal Note

Frequent Traveller Privileges to experience The Entry to the World of Status Customers

Base Member A World to experience Miles & More – Your Partner with real Added-Value

Passionate - Caring - Responsible 32 Miles & More Promotion Example

Miles & More Silver Promotion: FTL Status is within Reach!

 CRM-Based Miles & More Action to reach Frequent Traveller Status based on Flight Target of 15 Return Flights (=30 Segments) in 2013

 Objectives: Customer Retention and Loyalty, Incremental Business via Flight Targets, Customer Added-Value

 Approach: Proactive Communication of Frequent Flyer Status Advantages (e.g. Business Lounge, higher baggage allowance, exclusive service hotline, etc.… ) to encourage Incremental Flight Bookings by Customer

Passionate - Caring - Responsible 33 CRM-based Luxair Loyalty Actions

Luxair Loyalty Actions

 CRM-Based Loyalty Actions on selected Key Destinations with Flight Targets based on Customer Subscriptions

 Objectives: Revenue Protection, Win Market Share, Customer Retention and Loyalty, Incremental Business

 Approach: Flight Targets in a Predefined Flight Period: 5 Return Flights = 1 Free Ticket, 4 Return Flights = Gift Voucher, TOP 5 Customers = Flight + Hotel City Trip

 Results: CRM-Target Customers with +40% Flight Activity in Average during Action Period!

Passionate - Caring - Responsible 34 Agenda

1. LuxairGroup: Passionate – Caring – Responsible

35 New Luxair eServices Vision

New “Luxair Feel Free Experience” IATA E-Services & Fast Travel Vision Vision

• E-Services – Convenient Travel : CUSTOMER ADDED-VALUE Facilitate Sales & Customer Services • Feel Free Experience = Customer Choice through all Distribution Channels • Fast Travel Experience = Save Time & Ease

• Fast Travel – Full Self-Service Suite: LUXAIR KEY ADVANTAGES Speed up Passenger Journey & • Image: Modern Services in line with Industry Standard Address Customer Demands for more • Perception: Comfort & Flexibility for our passengers Choice, Convenience, Control • Efficiency: Process Speed, Efficient Handling, Long- term Return on Investment

36 Luxair eServices – Save 20 Minutes at the Airport

Web & Mobile Check-In

Save 20 minutes at the airport and check-in online directly from home or from office – or even via your Mobile Phone!

Arrive at the airport with your boarding pass in hands: Print your boarding pass or receive it as a 2D barcode directly on your mobile phone

Select your seat in advance: Window or aisle? Take advantage of our free seat selection service

Passionate - Caring - Responsible 37 MyLuxair – Your Virtual Lounge on the Web

MyLuxair

 Retrieve and easily manage your Bookings  Save your Customer Profile Details for your next Booking  Subscribe to the Luxair Newsletter and benefit from Special Offers  Subscribe to SMS Alerts Services in Case of Irregularities  Choose your preferred Seat on Board  Check-in online or via your Mobile Phone – convenient, fast and easy  Print out your boarding pass or get it directly on your mobile phone  Contact our CallCenter in a fast and personalized Way

Already 25,000 Members, simply register via www.luxair.lu

Passionate - Caring - Responsible 38 Luxair unveils its Brand New Mobile Website mobile.luxair.lu

Smartphone usage increased heavily since 2010: 70% of passengers carry a smartphone! Booking tickets via mobile phones expected to rise from 2% of passengers to 7% by 2015.*

 Stay fully connected and updated when you are on the move. With Luxair’s brand new Mobile Site mobile.luxair.lu !  Optimised for Smartphones and tablets: Access to Mobile Check-In, Flight Status, Business Lounge Finder, City Guides, and many other valuable Services

 NEW! Book your next Luxair Flight with Ease directly from your Mobile Phone now!

Passionate - Caring - Responsible 39 * Source: SITA Passengers Self Service Survey 2012. 40