The Lufthansa Innovation Hub in Berlin is developing the future of travel. We visit the think tank belonging to Europe’s biggest airline.
If you want to know what the future of travel will look like, you had better be fit. The only way to get to Lufthansa’s Innovation Hub in the two-story attic apartment of an old building in Berlin’s Mitte district – where 32 tech-savvy men and women are thinking hard about revolutionary developments like self-driving, flying taxis – is to climb the stairs the old-fashioned and most sustainable way: on foot. This is probably no accident. Startups everywhere, not just in Silicon Valley, are expected to be fast, agile and flexible. In short, everything that traditional German corporations with their underground parking, lobbies and elevators, are often not. This is why Daimler, Thyssen-Krupp and Deutsche Bank are spending money on labs, hubs or accelerator programs. In Germany, there are now roughly one hundred such startup-like units whose purpose is to advance digitalization within the companies that are funding them and open up new areas of business. Rather than feel threatened by the next big technological innovations, companies are driving them themselves. In 2017 and 2018, German business magazine Capital and management consultancy Infront Consulting evaluated 60 German labs and accelerators: The Lufthansa Innovation Hub was the front-runner.
Fifth floor, up under the roof: a sparsely furnished, 350-square-meter space. In 2016, the Hub moved into the shopping triangle between Rosenthaler Straße, Neuer Schönhauser Straße and Weinmeisterstraße in Berlin. It looks temporary, but Lufthansa will be financing the experiment until at least 2020. Highlighting the Hub’s autonomy, a green MS-DOS lamp on the wall serves as an additional logo alongside the Lufthansa crane. For employees from other parts of the Group, this is their first experience with a startup. For those from the startup world, it’s their first time working for a big company.
Rather than feel threatened by the next big innovations, companies are driving them themselves.
Gleb Tritus, 33, fair hair, three-day stubble, easy smile, is not an elevator guy. He has founded four startups, including an online marketplace for concert tickets and a shopping platform for cosmetics. In addition, he has also supported other startups in the role of business angel. Tritus has been with the Innovation Hub from the start – since 2014. Today, he’s the managing director of this wholly-owned Lufthansa subsidiary, responsible for the development of the Innovation Hub – and for changing the way we travel.
There’s quite a bit that Tritus would like to change. “All that waiting around is a real waste of time – the long trip to the airport, the security checks, the time spent at the gate. Then there’s often a disconnect between the information on the airport information boards, what the airlines communicate and what digital travel updates provide. Here the flight is on time, there it’s delayed and elsewhere it’s not even shown. Luckily, everyone involved is working hard to improve transparency and create a seamless travel experience.” Unnecessary disruptions while traveling on business is something Tritus and his team have also experienced. Working closely with Lufthansa is crucial because of the airline’s specific knowledge, and the team visits headquarters in Frankfurt at least once a week. The team focuses especially on areas where they can create immediate value for travelers and have the means to change things. “The lines in front of security are an important part of a customer’s experience,” Tritus says, “but airport operators are in charge of their own infrastructure, so in areas like that, we need to collaborate and work with what already exists.”
Baggage delays are another matter entirely. LINEA, a system developed by the Hub, informs customers by email or text message if their baggage won’t arrive as planned. After clicking on the link, you choose your preferred mode of compensation: a voucher, miles or a direct payment. “Customers no longer have to go to a counter and fill out a form,” says Tritus. The model is currently being tested for delayed luggage only, but it will eventually also be used for flight delays, rendering companies that claim compensation on behalf of passengers superfluous. Tritus and his team also designed a new type of ticket called a Flightpass, a kind of strip ticket for air travel. Within a week, they had a sales model in place: an online shop all set to sell 300 tickets. The tickets proved so popular that the Lufthansa subsidiary SWISS launched a trial run, selling out within a day. Set up a hypothesis, create a prototype, confirm the hypothesis: exemplary! “We were able to gain new customers who also flew far more often,” Tritus says with satisfaction. And they did all that without months of testing or spending lots and lots of money.
In 2016, the travel industry achieved worldwide sales of 2.3 trillion euros. Indirect sales were even higher, reaching 7.6 trillion. The sector is growing far more quickly than the world economy. Despite or perhaps because of the increased importance of digitalization, online bookings, evaluation portals and platforms such as Uber and Airbnb are changing travel behavior. How can you prevent an online ticket agent from popping up overnight and disrupting ticket sales? Or Google Home or Amazon Echo from jumping in? The team analyzes technical micro- and macrotrends to find answers to questions like these.
Enter tall, dark-haired trend and market analyst Lennart Dobravsky, 31. He monitors 2500 selected travel sector startups for the Hub. “These include inspirational platforms (Where do I want to go?), booking and sharing (How do I share my experiences with friends and family?),” he explains. The conference room where he and his colleagues are sitting boasts white walls, a white table and a whiteboard covered with neon-colored sticky notes. The next five years of the Lufthansa Group’s digital strategy are being planned right here, but the team has its sights on the more distant future, too: How will the travel experience change on ultralong-haul flights with no stopovers? Will people jet around on virtual flights like at the VR restaurant First Airlines in Tokyo? Can blockchain technology make tickets transferable? The trend analyst investigates how close these technical revolutions are to becoming reality.
“One trend that is already establishing itself is the hyperpersonalization and individualization of the travel experience,” says Tritus – technologies, in other words, that accompany the customer from the booking stage to the end of their trip. Airlines tend to focus on safety and security, speed, noise control and emissions, and are subject to high cost pressures, so it’s not always easy to take individual wishes into account. This is where the Lufthansa Innovation Hub comes in. Take, for example, airlinecheckins.com, another Hub project. It works like this: Users send their booking confirmation to the free service, which automatically checks them in online according to their saved seat preferences once check-in is available. Their boarding card is then sent to them by email or text message. The service is available for more than 200 airlines and has been very well received. “Users send us thank-you emails and suggestions for improvement,” says Tritus. And what’s in it for Lufthansa? “We learn how travelers tick even if they don’t fly with us.” Age, place of residence, destination, ticket price: Data like this is an important competition factor, even if it’s shared.
External programmers have had access to selected Lufthansa Group data via the Open API interface since 2015. Fares and catering inventory can be integrated into online services and travel apps. “Making this data available had huge symbolic value,” says Tritus. Just recently, access to booking functions was granted as well. So a provider who offers customers in Tokyo an evening in Paris by way of VR glasses and a fancy French meal could conceivably offer air tickets along with the dessert. “This could open up new, highly lucrative distribution channels for our company in the medium term,” Tritus prophesies. Investment possibilities could also arise: “If we notice that an app is doing very well, a Lufthansa investment might speed up the process and we would then participate in its growth.”
Not all of the projects conceived at the Hub are immediately successful. Some are scrapped, others are put on ice. But if you’re flexible and fearless and like to try things out, you can help shape the radical change that is currently shaking up the airline business. In other words: Don’t wait for the elevator if you want to take off.
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