airline industry in germany
DESCRIPTION
This ppt is for a Global travel seminar to Germany. At there in May, 2008, we will visit Lufthansa and do case study. Elizabeth and I did a brief introduction in a pre-travel class session about the market overview, Porter's five forces analysis, leading Germany airlines, and the perceived trend of airline business modelsTRANSCRIPT
The Airline Industry of Germany
Presented by
Elizabeth ChiJia Liu
Market overviewPorter's five forces analysisMajor airports and airlines The trend for the future?
To be discussed...
German Airline Industry Volume vs. Value
German Airlines Market SegmentationVolume vs. Value
Market Forecasts Volume vs. Value
Porter’s Five Forces Analysis
Leading Companies
Lufthansa Air Berlin PLC & Co. Luftverkehrs
KG
Germanwings GmbH
Ryanair Holdings plc
http://www.youtube.com/watch?v=trVVwXQNXAk
Hub/base of Airlines
Strategic location
The importance of slots
Airports
Frankfurt am Main International Airport Passenger traffic -- No.1 in Germany; No.3 in Europe; No.8 worldwideCargo traffic -- the busiest airport in Europe A hub of Lufthansa, usually with over capacity operations
Munich International Airport The second busiest airport in Germany and the 28th busiest in the worldIt was named the "Best Airport in Europe" and the 4th best worldwideA hub for Lufthansa and Star Alliance airlines, main base for dba and LTU
Düsseldorf International AirportThe third largest airport in Germany Serves as the main hub for the airline LTU and as an important secondary hub for Lufthansa
Hamburg AirportGermany's oldest airport in operationThe 4th biggest German airport
Berlin Tegel International AirportHas the most scheduled flights among 3 Berlin Int'l airportsThe main base for Air Berlin and LTUTogether with Tempelhof International Airport, the 2nd oldest commercial airport in the world, would be replaced by Berlin-Brandenburg International (BBI) airport in 2012
Operating services to 209 destinations in 81 countries. Together with its partners Lufthansa services over 410 destinations.
German Flag carrier Key Metrics
in € millionRevenue (+13%)22,420 in 2007
19,849 in 2006
Net Profit (+106%)1,655 in 2007
803 in 2006
Cash flow (+36%)2,862 in 2007
2,105 in 2006
Total assets (14.7%)22,320 in 2007
19,461 in 2006
Employees (+7.7%)100,779 in 2007
93,541 in 2006
Luft means air, hansa was named after Hanseatic League, the powerful medieval trading group Founded in 1926, Berlin and headquartered at Cologne 400 subsidiaries worldwide Core activity: Passenger transportation Total passengers carried in 2007: 62,894,000
--No.1 in Europe and No.5 worldwide Primary operating regions: Europe, North America, Asia Co-founded and joined in Star Alliance in 1997 Acquired Swiss Airline in 2005 Partnered with Jetblue with a 19% share purchase in 2006 Considering purchasing Polish flag carrier LOT and bidding
for troubled Spanish flag carrier Iberia
Business Segments Overview
· Serving 841 destinations in 157 countries with a fleet of 411 aircraft
· Operated by Lufthansa AG parent group, Air Dolomiti, Lufthansa Cityline
and the Eurowings group including Germanwings
· A founding member of Star Alliance, a multi-lateral airline grouping
· Focusing on tapping passenger traffic in growing markets
· Operated by Lufthansa Cargo and undertakes freight transport
· The largest portion of freight is hbandled at Lufthansa cargo center, Frankfurt
· Provided by Lufthansa Technik, a world-leading provider of MRO services
· Covering 6 product divisions: Maintenance, Overhaul, Engines,
Components, VIP & Executive jet solutions
· Provided by Lufthansa Systems, customizing IT solutions for computer
center operations and offering IT infrastructure services to other industries
· Provided by LSG Sky Chefs, supplying 270 international airlines with
in-flight service from 190 catering facilities and having 30% market shareCatering
Passenger Transportation
Logistics
MRO
IT Services
Founded in 1978 and based in Berlin Second Largest airline in Germany The biggest low-fare carrier in Germany and the third largest in
Europe The fourth largest airline group in Europe in terms of traffic Slots at 20 German airports A fleet of 124 aircrafts (+6%) 28.2 million passengers (+10.4%) 135 destinations (+5.5%)
Company Profile
in € millionRevenue (+61%)
2,536 in 2007
1,575 in 2006
Net Profit21 in 2007
40 in 2006
Cash Flow (+48%)469 in 2007
316 in 2006
Total assets (+59%)2,519 in 2007
1,588 in 2006
Employees (+104%)8,360 in 2007
4,108 in 2006
Key Metrics
Acquisition Based Growth
Business model: The only European airline in the segment between traditional full-fair airlines and the low-cost carriers with competitive price/performance ratio
Positioning: Low cost carrier with full service on board and a wide range of extras
Strategy: Entry into long-haul business—closing the gap between conventional low cost carriers and traditional high-priced airlines
Goal: Going global after being a leading player in European aviation
Action Samples:
topbonus - worldwide frequent flyer program-—unparalleled in the LCC sector (more
than 1 million signed up) “Relax class” and “premium business class” Formed partnership in China with Hainan Airline (fly to 80 airports) Planned to merge with Thomas Cook subsidiary Condor
A Hybrid Business Model
Other Major Players
Germanwings
Ryanair
A privately held airline engaged in passenger transport A subsidiary of regional carrier Eurowings, which in turn
is controlled by Lufthansa With hubs in Cologne and Stuttgart and bases in Berlin
and Hamburg.
The largest low-cost carrier in Europe A scheduled passenger airline serving short haul, point
to point routes between Ireland, UK and continental
Europe 27 European bases, a fleet of over 163 aircrafts, over
50 million passengers in 2007 Seats are sold on one-way basis
The Trend for the Future?
Business ModelsMerge?
Low-costCarriers
TraditionalCarriers
TraditionalCarriers
Low-costCarriers
Full priceGood service
Low priceLimited Service
Low price, full service
Thank you and have fun flying Lufthansa!
http://www.youtube.com/watch?v=6sEANBlWVy8
Any Questions?