Lufthansa
Lufthansa 2000: Maintaining the Change Momentum
Prepared for:
Business 497a
Professor Don Fujitani
Section # 15663
Prepared by:
Amiel Traynum
Elin Ghadimian
Josh Sherriff
Ross Zalavsky
Ryan Neal
External Environment:
Global:
Worldwide events such as the Gulf War, followed by a recession, put a burden on the airline industry and on Lufthansa as a company. These events caused a major decrease in the amount of seats filled in the airline industry. In 1991 the Seat Factor decreased to about 57 percent in Europe, compared to 65 percent worldwide.
Socio-Cultural/ Demographic:
You can infer from the case that the growing alliances in the airline industry have been increasing due to globalization. In 1991, Lufthansa had an increase of passenger numbers by 11% due to German re-unification.
Legal/Political:
The airline industry was strongly regulated by the government in the US and most of the airline industry was owned by the government in Europe. This changed in the US when deregulation of the industry began in 1978 as airlines gained more lenience in operating their business. Before becoming privately owned and profitable in 1997, Lufthansa was a state-owned, national airline carrier of Federal Republic of Germany and the government had strict control over both routes and landing slots. Regulations for the rest of Europe were not as strict.
Economic:
In the past, an economic recession contributed to the major problem of a reduced seat load factor. Another economic recession in any of the countries in which Lufthansa Group does business could have the same affect. The price of oil is a major economic factor that affects Lufthansa and the rest of the Airline Industry. In particular, passenger and freight transport. Flight and trade networks opening or closing between nations would also affect the company since they would be able to either provide or stop providing services to or from those countries.
Prepared for:
Business 497a
Professor Don Fujitani
Section # 15663
Prepared by:
Amiel Traynum
Elin Ghadimian
Josh Sherriff
Ross Zalavsky
Ryan Neal
External Environment:
Global:
Worldwide events such as the Gulf War, followed by a recession, put a burden on the airline industry and on Lufthansa as a company. These events caused a major decrease in the amount of seats filled in the airline industry. In 1991 the Seat Factor decreased to about 57 percent in Europe, compared to 65 percent worldwide.
Socio-Cultural/ Demographic:
You can infer from the case that the growing alliances in the airline industry have been increasing due to globalization. In 1991, Lufthansa had an increase of passenger numbers by 11% due to German re-unification.
Legal/Political:
The airline industry was strongly regulated by the government in the US and most of the airline industry was owned by the government in Europe. This changed in the US when deregulation of the industry began in 1978 as airlines gained more lenience in operating their business. Before becoming privately owned and profitable in 1997, Lufthansa was a state-owned, national airline carrier of Federal Republic of Germany and the government had strict control over both routes and landing slots. Regulations for the rest of Europe were not as strict.
Economic:
In the past, an economic recession contributed to the major problem of a reduced seat load factor. Another economic recession in any of the countries in which Lufthansa Group does business could have the same affect. The price of oil is a major economic factor that affects Lufthansa and the rest of the Airline Industry. In particular, passenger and freight transport. Flight and trade networks opening or closing between nations would also affect the company since they would be able to either provide or stop providing services to or from those countries.