LUFTHANSA'S CUSTOM MARKETPLACE ASSESMENT

2 Lufthansa is looking for innovative ideas to increase their revenue streams Context ▪Lufthansa, one of the biggest airline carriers, is looking for a new way to increase their profitability –Operational efficiency is required to keep up with low-cost carriers –Innovation is key to steer away from the intense competition ▪Recently, Amazon launched a marketplace, which opens up the large customer base to business partners Come up with a creative idea to implement a similar marketplace within Lufthansa’s existing business plan OUR PROPOSITION AirDiscover, a destinations marketplace, could be a potential source of new revenue streams for Lufthansa“ The challenge

3 The Current Lufthansa Inflight Experience…. “I’ll be in Rome for two nights –what should I do after work hours?” -The Executive “What are we going to do at our destination? How can we take advantage of family discounts?” -The Family “I have a 4-hour layover in Paris, how should I make the most of my time?” -The Backpacker Client Entertainment Options Client Needs ▪Movies ▪Magazines ▪Books ▪Your neighbour…? But most of the time, Clients are probably thinking about their destination.

4 Introducing AirDiscover-“a destinations marketplace” A revolutionary marketplace for an extraordinary inflight experience

Dear Miss Nadja Assfalg

5 Connecting businesses with customers by leveraging our client base and supplier panel B2B B2C In-Flight Air Discover Supplier Market Place Platform Suppliers upload offers to the platform for relevant flights Suppliers include: Restaurants, Hotels, Excursion Trips, Museums… Customers search and book for destinations' activities and offers Are able to tailor offers to clients on specific flights Will be recognized as premium places Access to consumer base Plan trip in flight Receive premium selection of activities at a discount Make good use of flight time

Advantages for Lufthansa 6 Our platform will offer revolutionizing benefits to all parties involved ▪This marketplace would yield a win-win situation –The partner can efficiently target the customer –The customer receives personalized advertising –Better brand image for Lufthansa ▪Lufthansa would play an intermediary role, benefiting from a commission –An automated platform shouldn’t require much operational costs –A gradual phase-in with a strong base would allow further expansion in the future ▪Lufthansa benefits from strong bargaining power with a large client base –Competitive platform lowers prices for consumers –Lufthansa able to negotiate large commissions REVOLUTIONIZE THE INDUSTRY

7 Commission based model will maximize revenues ▪Customers will get an access code that offers them a reduction ▪Targeted advertising about destination –Example: Customer purchases a scuba diving excursion, Lufthansa gets a 20% commission Basic model How does it work? Subscription is free for suppliers Customers get access to the platform through purchasing their flight with Lufthansa Lufthansa takes a commission on services purchased through the platform Extra features ▪Premium account for suppliers will boost revenues –Be able to target special flights and differentiate offers –Giving suppliers information about incoming flights

8 AirDiscoveroffers multiple opportunities for expansion 2016201720182015 Createplatform Expand platform Exploreonline options Platform serves allairlinesin the Lufthansa group ‒Offer onlyin flight reductions ‒Offer targetedandconvenience advertising 123 Otherairlinecompanies are interested ‒Franchise Fee ‒Commissionon numberof transactions Explandplatform: ‒Offer out-flight reductions ‒Personalizedcode willoffer reductions Multiple step approach decreases risk and optimizes reward “