Andrzej Jeziorski/MUNICH
Lufthansa is to open up its Miles & More scheme to passengers on competing smaller airlines flying internal German routes, bringing to a close a test case under investigation by state competition authorities.
A complaint was raised with the authorities in May by Lufthansa's Dortmund-based competitor Eurowings, which claimed that the Miles & More scheme violated strict German competition regulations by giving Lufthansa an unfair advantage in the market.
With Lufthansa's agreement to allow passengers on other domestic carriers - including Eurowings - to collect frequent-flyer points, smaller competitors are no longer disadvantaged, says the Berlin-based competition watchdog, the Bundeskartellamt.
According to Eurowings marketing director Karl-Friedrich Müller, the Miles & More scheme is now open to his company and other German regional carriers.
Another Eurowings complaint is that business travellers whose flights are paid for by their employers gather rewards from these flights for their personal accounts. Müller says that, because of its complaint, companies will in future be able to monitor their employees' accounts, and ensure that points gathered in this way are used only to pay for business travel. The Bundeskartellamt says that it will watch to ensure that Lufthansa puts its agreement into practice. Müller says that the changes make the frequent-flier scheme less effective as a marketing tool for Lufthansa.
"I have my doubts whether it's really worth having a frequent-flier scheme," he says.
If every airline on the market has such a scheme, argues Müller, then none has a competitive advantage and all are incurring costs of "hundreds of millions of dollars".
The only occasion when such schemes are an advantage, according to Müller, is when - as in the German domestic market - one carrier has market dominance, and smaller rival carriers cannot afford to finance their own frequent-flier schemes. Lufthansa now holds about 85% of the German domestic market.
The German Government has opened bidding for the sale of its remaining 37.5% stake in the national airline, Lufthansa. Investors now have until 10 October to apply for the 143 million shares which are on offer, with private investors in Germany being given preference.
In the sale, worth about DM4.5 billion ($2.64 billion) overall, Lufthansa says that it is planning to place two-thirds of the new shares in Germany, with the rest open to foreign investors.
Source: Flight International
