Lufthansa overselling first class as a trial — should we be worried?

‏@DoIevenmatter Tweeted me a link to a Business Traveller article about Lufthansa trial overbooking first class, and asked if it worries me. While overselling economy and business class is fairly common, it’s rare to oversell first class. After all there are fewer seats and it’s a bit more “high stakes” to deny a passenger a ticket when they paid $20,000 for it.

Per the article, the cities where they seem to be trialing this include New York, Mexico City, Johannesburg, Miami, Sao Paulo and Singapore. They go on to say:

Lufthansa said in a statement: “Since July, we have been testing controlled overbooking of our first class in order to further improve occupancy in this class.

“There is the possibility to overbook by two seats only until 30 days prior to departure. This leaves us with room to still react during these 30 days and to offer alternatives to our customers.

“The ongoing test has shown that with this procedure we were able to improve occupancy and at the same time avoid overbooking of our first class. Since the start of this trial in July there hasn’t been any case in which we had to rebook customers into another classes.”

While this might seem incredibly customer unfriendly, in reality I think the fact that nobody has been bumped under the new overbooking program says it all. The key here is that they’re only overbooking 30 days (or more) out. Keep in mind that unlike most economy class tickets and many business class tickets, virtually all first class tickets are refundable, so out of eight passengers it’s almost guaranteed that some passengers will cancel or change their flights within a month of departure.

And if they’re not, they can reach out to the passengers closer to departure and offer them an alternative that’s mutually beneficial. I’d be willing to bet they’ll never involuntarily deny a first class passenger boarding under this strategy. After all, they’d still come out ahead offering a first class passenger a seat on a different routing and several thousand dollars cash, for example, than not overbooking at all.

But the reason this is even less concerning as an award passenger is because whether a flight is booked full in first class or whether it’s overbooked by two people in first class really doesn’t impact us – regardless there won’t be any award space. The flights we see award space on are mostly the ones that consistently have 6-8 empty first class seats just a couple of weeks out (which is the case more often than you’d think).

My guess is that it’s extremely rare that they’re even overselling since there aren’t many routes where there’s actually that much demand for first class (and I assume when they’re overselling it’s only at the absolute full fare rate), but historical data almost never lies.

So I see nothing wrong with this and it certainly doesn’t bother me.

Comments

  1. I was actually wondering what Lufthansa would give to me in exchange (or in other words how much they’d pay) for overbooked first class international seat 🙂

  2. @ Lucky — how many LH F flights have you been on that only had 1-2 spare seats? From reading your reports, F isn’t usually 100% booked up.

    I think the most regrettable part of this situation is LH’s willingness to misrepresent what happened:
    “According to Der Spiegel, where there is an overbooking situation Lufthansa passengers are told by prepared statement that: “Technical problems in our booking system have led to an extremely rare case of simultaneous reservation assumptions. My colleagues are already busy trying to find an optimal solution so that such cases are excluded in the future.” ”

    If LH were a bit more honest, I would accept this, especially if LH is reaching out to overbooked customers a week or so ahead of time to make alternative arrangements and not making them show up to the airport.

  3. On average LH sells 2-3 F seats per flight. There are a few routes where they do better, to be sure, but the idea of overselling first class — and only doing this up to 30 days prior, whereas business travelers going F tend to book later — seems a non-event.

  4. @ Ivan Y — I’ve had very few Lufthansa flights with more than five seats taken in first class, and even usually then that accounts for multiple upgrades day of.

  5. Interesting. When I flew FRA-DTW on two award F tickets (released one at a time), the whole F cabin was chock full (8), SENs and one HON.

  6. IME, the 747 (330 is not, but it’s old F) IAD flights are almost always full. Maybe it’s due to the high population of *A elite flyers, but in 6 IAD-FRA or FRA-IAD flights, every single one has been 8/8 full. The MUC flight is also pretty hard for awards.

  7. @ Justin — I suspect that’s largely also due to day of upgrades. United flyers have systemwide upgrades they can use day of on Lufthansa, so I’m guessing that route sees more of those than others due to it being a United hub.

  8. I don’t know why your summary is omitting the communication that Lufthansa is sending out in case of an overbooking.

    The letter leaked by The Spiegel and correctly posted by Ivan Y is another sad example how little Lufthansa is interested in treating customers fairly.

    Overbooking is not a scandal and contrary to belief Lufthansa is already often selling all 8 seats for certain days on the ‘test routes’ in F and A. The overbooking approach helps achieving that even more often.

    The scandal is Lufthansa bluntly lying at customers claiming a ‘technical error’ where they are willing to accept the situation of the overbooking in the first place. Shame on them for that scharade.

  9. “While this might seem incredibly customer unfriendly, in reality I think the fact that nobody has been bumped under the new overbooking program says it all.”

    Says it all? Really? So LH gives me a choice between being involuntarily downgraded or taking another flight entirely and because I choose another flight that says it all? That’s just lazy reasoning devoid of critical analysis.

  10. @ Dax — That’s the whole point, nobody has been involuntarily downgraded under the program. Unless I’m missing something?

  11. Lucky,

    Having to choose between the schedule we already ticketed or the cabin we already paid for is a lousy proposition for those of us who are not lucky enough to have unlimited free time to be rerouted with whatever is left when we show up. That everyone selected the white poison pill vs. the red poison pill over a relatively short period of time doesn’t really say as much as you seem to think it does. Before long someone will get burned on a schedule they’re not able to change and they’ll be forced to pick the downgrade. Will that change your opinion on this, or is there anything LH can do that would actually sour you on endlessly apologizing for them?

  12. @ Dax — Me endlessly apologizing for them? Have you read what I’ve wrote about their non-first class experience?

    Look, a VOLUNTARY denied boarding is mutually beneficial. If I’m booked on a flight and the airline offers me something that makes it worth my while to switch flights, then the airline wins and I win as a consumer.

    Now if they were calling and threatening people by saying “you have to take the alternative or you’ll be downgraded” I’d agree with you.

    But if they’re calling someone up and saying “how would you feel about taking the later flight and we’ll give you $5,000 cash?” I think that’s a win-win.

Leave a Reply

Your email address will not be published. Required fields are marked *