Lufthansa wolf of the runway

The world’s biggest aviation group, Lufthansa, aims to grow non-airline revenues by 10% by 2020 and is looking for innovative start-ups to inject ideas for ways to do so.

Describing the group as an “aviation business” rather than airline, it is now concentrating on increasing “high yield broader aviation services” from new businesses and platforms according to Lufthansa, senior vice president corporate strategy & innovation, Sadiq Gillani, speaking to Travel Weekly at the Asia-Pacific press launch of the airline’s new Premium Economy product in Frankfurt today.

As part of the group’s strategy to tap into start-ups and conceptual businesses it launched an entirely new entity the “Lufthansa Innovation Hub” in July 2014, working on co-creation projects with technology companies in Berlin, away from its Frankfurt headquarters for better fostering of ideas in a “new environment”, Gillani said.

Currently employing just 13 staff, Lufthansa pumped in an overall 5 million euros toward the separate company with a further 10 million euros up for grabs each year to fund any project “innovators” or those via joint-venture with start-ups, seek to produce.

The fruits of their labor are expected to fuel growth from Lufthansa’s current share of non-airline revenue which sits at 30% to a projected growth of 40% by 2020.

“Lufthansa has a very strong record of innovation and we pride ourselves on this strength,” Gillani said.

“The Innovation Hub co-creates business opportunities with start-up technology companies that would like to sell their services to our customers. We have over 100 million travellers in our systems.”

The move also sits within Lufthansa’s future plans to create a seamless travel experience for its passengers, or travellers, as Gillani says, regarding a greater cultural mindset shift the carrier is embarking on throughout the company.

Hosting “hackathons” and “scouting” for new ideas is all part of the strategy, Gillani said, with the group having already screened 85 start-ups, choosing to partner with five, one revealed as home-sharing concept, airbnb and the other Blacklane limousine – a German-authorised version of Uber.

However, the group will also work on engineering its own development of digital products and apps at the Hub, with two already in the pipeline Gillani told Travel Weekly, and describing both to be at the “forefront of what’s going on in the travel industry”.

While the apps are “still in the early stages”, Gillani said both were designed to improve the travel experience and make the “customer journey” more seamless.

According to Gillani, only a handful of major airlines are considered to be investing heavily in the “innovation space” and includes Emirates, Singapore Airlines and Delta Air Lines to name a few because “other airlines don’t have the scale to do so”, he said, but noted the airlines only represented 10% of the world’s capacity and therefore was a relatively “small’ playing field.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

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