Lufthansa has made book profits of €100 million ($120 million) from the sale of its customer rewards company Loyalty Partner as it continues its strategy of focusing on its core business.
Lufthansa subsidiary Lufthansa Commercial Holding sold its 52.6% stake in Loyalty Partner to venture capital firm Palamon Commercial Holding in late September.
“Our stake in Loyalty Partner was a first-class investment,” says Lufthansa chief financial officer Dr Karl-Ludwig Kley. “Over a period of several years, we have helped fuel the growth of the company.”
Lufthansa’s original involvement in a general consumer loyalty programme, in 2000, broke new ground, with the company seeking cross-selling opportunities between general consumers and flyers. The sale now suggests Lufthansa is ridding itself of direct involvement in consumer loyalty programmes.
Ravindra Bhagwanani of Global Flight Management, a consultancy specialising in frequent-flyer programmes, says: “This suggests that there are less cross-selling opportunities than expected and that there are also limited management synergies.”
Bhagwanani says that frequent-flyer programmes face different management challenges than consumer programmes. “You can’t simply copy a successful frequent flyer-programme formula and use it for a consumer loyalty programme,” he says.
ANDREA CRISP/LONDON
Source: Airline Business
