Institute for Simplicity

The nice tries of Lufthansa to compete with so called low-cost airlines reveal how little Lufthansa knows about complexity. Discount means concentration on the essentials and avoiding everything which is nice to have and often considered to be standard in the industry. In addition, of course, it means lowest possible prices by far. 

Lufthansa´s daughter company cannot live without another irrelevant board magazin on the plane. Eurowings is also investing heavily in one of the broadest offers of foods and drinks on board to serve those customers who maybe hungry on a short 45 minutes flight.

The „Wings bistro“ menu offers exactly 100 items, including „Deals“ where you save 40 Eurocents and different combinations of sandwiches, softdrinks, coffee and sweets. Three different payment methods are available. As Eurowings has three different classes to travel in (normally there are 2 only: Business and Economy but Eurowings wants to make it especially simple!), the crew has to also keep that in mind as every passenger is charged in a different way.

One of the most frequent traps when trying to be discounter: You can easily get the benefit in terms of revenues from additional sales on board. The cost of complexity is not visible easily and does not show up in the numbers of controllers or marketing experts. Such cost are difficult to calculate, usually hidden in General Administration and Sales expenses: negotiations and agreements with the supplier, developing and maintaining the assortment, calculation of sales prices, planning and purchasing the quantities of each item needed, designing the menu and probably hiring a marketing agency for this, managing differences in cash, getting the money to the bank, handling and booking of losses due to shrinkage, expiration, handling of garbage and many others… for so many flights every day (exponential!).   

It takes more to be a successful discounter. It is about omitting, about asceticism, about courage to be different. Never let the marketing department run this project! Don´t even have them! Our suggestion: no drinks and food at all on short distance flights but as much coffee, water and tea for free at the gate. And: Lower the prices substantially. The question is not how high can I set the price? The correct question is: How low can I set the price?

The question is not: What else can I sell on board? The question is: What else can I avoid?

Lufthansa today has as little creativity as understanding of business models.