This paper analyses Eurowings' marketing strategy by applying different macro- and microeconomic tools in order to consider competition, political forces, environment influences and economic impacts. The goal is to examine in particular Eurowings' low cost long haul business model and which strategy was selected by the Lufthansa Group and how this strategy works. Additionally, the objective is to analyse Eurowings European competitors, with the major goal first to understand Eurowings' market position in Europe. Subsequently, the results of this strategic assessment show Eurowings' strengths, weaknesses, opportunities and threats.
The aviation industry in the 21st century has been changing continously. The low-cost carrier business model has revolutionised the commercial transport industry. Commercial Aviation industry and its development is positively influenced by external factors such as politival, social, economic and technological developments. Airlines are therefore forced to adjust their business models to the external factors and new market requirements, as well as to introduce new business concepts with the objective to gain more market shares and competitive advantages.
The European market is divided into different low-cost carriers, each fighting for customers, image, and profit. Eurowings is a new player in this low-cost business, in particular in the market for long-haul destinations, which could become an opportunity to be the first successful low-cost German airline and the third biggest low-cost carrier in Europe.
Table of Contents
1 Introduction
1.1 Problem definition and current situation
1.2 Objective
1.3 Methodology
1.4 Structure of the thesis
2 Strategic Concepts of Macro- and Micro-environment
2.1 Macroeconomic strategic concepts
2.1.1 PEST Analysis
2.1.2 Porter’s 5 Forces
2.2 Strategic concepts
2.2.1 7S Framework by McKinsey
2.2.2 Advantages and disadvantages
3 Basics of Air Traffic and Aviation Industry
3.1 Commercial aviation industry
3.1.1 Historical development
3.1.2 Technological revolution
3.2 Different types of Air Transportation
3.2.1 Different types of Air Transport: Airline Business Model
3.2.2 Different types of Air Transport: Network of Operations
3.2.3 Different types of Air Transport: Types of flight routes
3.2.4 Different types of Air Transport: Types of Strategic Networks
3.2.5 Different types of Air Transport: Types of aircrafts
4 Research Methodology
4.1 Research questions
4.2 Research design
4.3 Web survey
5 Eurowings’ Assessment
5.1 Eurowings’ connection to Lufthansa
5.2 Eurowings’ operations network
5.3 Eurowings’ product and service
5.4 Eurowings’ sales and marketing campaigns
6 Strategic Analysis of Eurowings’ Long-Haul Concept
6.1 Feasibility of Eurowings with PEST Analysis
6.1.1 Political factors
6.1.2 Social factors
6.1.3 Economic factors
6.1.4 Technological factors
6.2 Feasibility of Eurowings with Porter’s 5 forces
6.2.1 Intensity of rivalry
6.2.2 Risk of entry by potential competitors
6.2.3 Power of buyers
6.2.4 Threat of substitute
6.2.5 Power of suppliers
6.3 Feasibility of McKinsey 7S Framework
6.3.1 Hard elements
6.3.2 Soft elements
7 Empirical Analysis of Eurowings Long-haul Concept
7.1 Pre-test
7.2 Assessment and implementation
7.3 Survey results and sample
8 Conclusion and Results
8.1 Macro and microeconomic results
8.2 Assessment results
8.3 Method discussion
9 Outlook and Recommendation
Objectives and Research Themes
The core objective of this master thesis is to assess the strategic feasibility of the "new" Eurowings long-haul business model within the Lufthansa Group. The research addresses whether Eurowings can successfully establish itself as a viable low-cost long-haul carrier while navigating challenges such as unpunctuality, intense competition from other European low-cost carriers, and fluctuating macroeconomic factors.
- Strategic analysis of the Eurowings long-haul concept using macro- and microeconomic frameworks (PEST, Porter's 5 Forces, McKinsey 7S).
- Empirical investigation of customer requirements on long-haul routes via a web survey.
- Evaluation of Eurowings' competitive position against major rivals like Norwegian Air, Ryanair, and EasyJet.
- Assessment of operational and structural challenges within the Lufthansa Group integration.
- Formulation of target-oriented recommendations for future strategic development.
Excerpt from the Book
1.1 Problem definition and current situation
With launching Eurowings on the first LCLH flight in November 2015 from CGN to Varadero (Cuba), Lufthansa Group (LHG) management board of directors rapidly introduced new destinations to the Caribbean. The first flights of Eurowings were punctual, but after launching other long-haul destinations, Eurowings experienced business chaos, permanent delays (over eight hours on average for every third flight) with growth of delay costs as well as high compensation costs (Spiegel, 2016). Furthermore, Eurowings suffered from company image problems and negative headlines in the German press. After temporary stabilisation of punctuality problems, Eurowings received additional one wide-body aircraft for flights between CGN and Asia. In May 2016, Eurowings’ flight from Phuket to CGN was delayed for over 30 hours and over 300 passengers were affected (WAZ, 2016). At the same time, another flight from the Dominican Republic was delayed for over 25 hours simply because the flight crew did not get enough layup (Frommberg, 2016). This begs the question as to how Eurowings can stabilise its air traffic and schedule plan.
Summary of Chapters
1 Introduction: Provides an overview of the global aviation industry, introduces the Eurowings business model, and defines the thesis objectives and methodology.
2 Strategic Concepts of Macro- and Micro-environment: Explains key strategic management tools like PEST analysis, Porter’s 5 Forces, and the McKinsey 7S framework used for the thesis analysis.
3 Basics of Air Traffic and Aviation Industry: Outlines the history, technological evolution, and different carrier types (FSC, LCC, RC, CC) within the commercial aviation industry.
4 Research Methodology: Details the research design and the application of a web survey to analyze customer criteria for long-haul flights.
5 Eurowings’ Assessment: Examines Eurowings' historical development, its corporate integration with Lufthansa, operations network, and marketing strategies.
6 Strategic Analysis of Eurowings’ Long-Haul Concept: Applies PEST, Porter's 5 Forces, and McKinsey 7S to assess the feasibility of Eurowings' strategic model.
7 Empirical Analysis of Eurowings Long-haul Concept: Presents the pre-test, assessment, and results from the conducted web survey regarding passenger preferences.
8 Conclusion and Results: Synthesizes the findings from the strategic and empirical analyses, offering conclusions on Eurowings' market positioning.
9 Outlook and Recommendation: Provides final suggestions for improving Eurowings' long-haul strategy and operational performance.
Keywords
Eurowings, Lufthansa Group, Low-Cost Carrier, Long-Haul, PEST Analysis, Porter's 5 Forces, McKinsey 7S, Aviation Industry, Air Traffic, Flight Delay, Strategic Management, Passenger Survey, Competitive Analysis, Point-to-Point, Market Share
Frequently Asked Questions
What is the primary focus of this master thesis?
The thesis focuses on the strategic feasibility of the Eurowings long-haul concept, specifically assessing how it can compete effectively in the European market while managing operational challenges like unpunctuality.
Which strategic frameworks are applied in the study?
The author utilizes PEST analysis for macroeconomic environmental factors, Porter’s 5 Forces for industry competition, and the McKinsey 7S framework for internal organization assessment.
What is the core objective of the research?
The main objective is to identify critical criteria that passengers prioritize for long-haul low-cost flights and to analyze how Eurowings can adapt its strategy to become a top-tier LCC in Europe.
What methodology was used to gather empirical data?
The author conducted a quantitative web survey, which was distributed via social media and email, to collect feedback from 351 participants regarding their flying habits and preferences.
Which major competitors of Eurowings are analyzed?
The analysis compares Eurowings primarily against Norwegian Air, Ryanair, and EasyJet, focusing on their respective business models, fleet strategies, and market networks.
What are the key themes explored in the research?
Key themes include the competitive landscape of the aviation industry, the impact of external political and economic factors on airlines, fleet management, and the importance of service quality.
How does the author evaluate the "new" Eurowings fleet?
The author analyzes the mix of aircraft types (A319, A320, CRJ900, A330) and notes that Eurowings faces challenges with long turnaround times, which affect productivity and costs.
What is the conclusion regarding Eurowings' punctuality problems?
The research concludes that Eurowings has struggled significantly with flight delays, leading to image problems and negative press, and suggests that the airline needs to urgently stabilize its operations to improve customer satisfaction.
- Citation du texte
- Maxim Lachmann (Auteur), 2016, Low Cost Concept for Long-Haul Destinations. A Feasibility Analysis of Eurowings' Strategies, Munich, GRIN Verlag, https://www.grin.com/document/374775
