After five years of vast losses, especially for the IATA Carrier, which are all scheduled airlines, 2007 will be a successful year for the airline industry, with a forecasted profit of $8.5 billion.
The early 21st century marked the industry with high losses and consolidation. Due to the reason that the industry sector highly depends on the external environment: the terrorist attacks of September 11th 2001, magnified by the weak economic conditions in many major countries and more recently the Iraq War and SARS epidemic, have made the last five years unhappy ones, especially for most of the schedules airlines. In addition to that, the liberalisation of the European aviation market enabled low cost airlines to reshape the competitive environment and to make significant impacts in the world’s domestic passenger markets, which have previously been largely controlled by full service carriers.
The overall market situation is dominated by increasing pressure on cost and productiveness. The global market trend forces a high company concentration that strengthens market positions.
Lufthansa - Germany’s national carrier was faced, like all other national carriers with the above-mentioned problems and had to find its way out of the crisis.
The central question of this report is: With which tools did Lufthansa solve these problems? And are these tools sufficient to be competitive for future developments? This report paper is dealing with the developments in airline business illustrated with the example of Germany’s national carrier, the Lufthansa AG, and the enormous company restructuring toward an ideal global player in a highly competitive environment.
By analysing the internal and external influences, pressuring the company to adapt, the need of change by Lufthansa will be made more comprehensible.
The learning organisation and the role of creativity have become more important during the last decades, especially in fast changing environments like the airline industry where Lufthansa operates. This will be a special regard in chapter four.
In the last section of the report a critical analysis will be made on the effectiveness of the organisation’s response, and some areas of improvement will be mentioned.
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 2 Procedure
- 3 Analysis of Lufthansa's Business Environment
- 3.1 External factor influencing the organisation
- 3.1.1 The demand for passenger air services
- 3.1.2 Liberalisation of European air transport
- 3.1.3 Competitive Environment and Globalisation
- 3.2 Internal factor influencing the organisation
- 3.2.1 Organisational structure
- 3.2.2 Human relation policies
- 3.2.3 Skills and performance of the employees
- 4 The learning organisation – organisation as brains.
- 4.1 Definition of the term learning organisation
- 4.2 Define the term of creativity within an organisation
- 5 The impact of the learning organisation and the role of creativity on Lufthansa's Policy and Decision Making Process.
- 5.1 The learning organisation towards the external environment
- 5.2 Learning organisation towards innovation
- 5.3 Learning organisation towards customer expectations
- 5.4 Learning organisation towards personnel
- 6 Evaluation of the Effectiveness of Company's response.
- 6.1 Effectiveness of Lufthansa's response
- 7 Areas for Improvement in the Company's response.
- 7.1 Staff Satisfaction Measurement
- 7.2 Future Markets
- 7.3 Reliability
- 8 Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This report paper analyzes the developments in the airline business, focusing on Germany's national carrier, Lufthansa AG, and its restructuring towards a global player in a highly competitive environment. The report aims to understand how Lufthansa overcame the challenges of the early 21st century airline industry, characterized by high losses and consolidation, and explore if its strategies will be sufficient to ensure future competitiveness.
- The impact of external factors on the airline industry, including the demand for passenger air services, liberalization of European air transport, and globalization.
- The role of internal factors, such as organizational structure, human relations policies, and employee skills, in shaping Lufthansa's response to external pressures.
- The concept of the learning organization and the importance of creativity in a rapidly changing industry like aviation.
- The effectiveness of Lufthansa's response to industry challenges and the identification of potential areas for improvement.
Zusammenfassung der Kapitel (Chapter Summaries)
- Chapter 1: Introduction: This chapter provides an overview of the airline industry's recent history, highlighting the challenges faced by scheduled airlines, particularly in the wake of the September 11th attacks, economic downturns, and the emergence of low-cost carriers. It also introduces Lufthansa as a case study and presents the central question of the report: how did Lufthansa address these challenges and is its strategy sufficient for future success?
- Chapter 2: Procedure: This chapter outlines the methodology and scope of the report, explaining that it will analyze Lufthansa's adaptation to the competitive environment through a comprehensive analysis of both internal and external influences. The significance of the learning organization and creativity will be examined in detail, and the report will conclude with a critical analysis of Lufthansa's response and identify potential areas for improvement.
- Chapter 3: Analysis of Lufthansa's Business Environment: This chapter explores both the external and internal factors influencing Lufthansa's business environment. The external environment is analyzed using the PESTLE framework, focusing on political, economic, social, technological, legal, and environmental factors. The internal environment is examined through the lens of organizational structure, human relations policies, and employee skills.
- Chapter 4: The Learning Organisation – Organisation as Brains.: This chapter delves into the concept of the learning organization, defining the term and its relevance in dynamic environments like the airline industry. The importance of creativity in fostering innovation and adaptability within the learning organization is also explored.
- Chapter 5: The impact of the learning organisation and the role of creativity on Lufthansa's Policy and Decision Making Process.: This chapter examines how Lufthansa has implemented the learning organization concept, analyzing its impact on decision-making processes and its response to external factors, innovation, customer expectations, and personnel management.
- Chapter 6: Evaluation of the Effectiveness of Company's response: This chapter assesses the effectiveness of Lufthansa's response to the challenges outlined in previous chapters. It analyzes the company's strategies and their impact on its overall performance.
- Chapter 7: Areas for Improvement in the Company's response: This chapter identifies potential areas for improvement in Lufthansa's response to industry challenges. It suggests further steps the company could take to enhance its performance and ensure long-term success.
Schlüsselwörter (Keywords)
This report focuses on the airline industry, particularly the challenges faced by scheduled carriers like Lufthansa. Key topics include the impact of globalization and liberalization on the aviation market, the role of low-cost carriers, the concept of the learning organization, the importance of creativity in strategic decision-making, and the effectiveness of Lufthansa's response to industry challenges.
- Quote paper
- Martin Albers (Author), 2007, Lufthansa in its competitive environment, Munich, GRIN Verlag, https://www.grin.com/document/91735
