airline industry in germany 1208567927863620 8
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The Airline Industry of Germany
Presented by
Elizabeth ChiJia Liu
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Market overview
Porter's five forces analysis
Major airports and airlines
The trend for the future?
To be discussed...
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German Airline Industry
Volume vs. Value
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German Airlines Market Segmentation
Volume vs. Value
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Market Forecasts
Volume vs. Value
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Porter’s Five Forces Analysis
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Leading Companies
Lufthansa Air Berlin PLC &Co. Luftverkehrs
KG
GermanwingsGmbH
Ryanair Holdingsplc
http://www.youtube.co
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Hub/base of Airlines
Strategic location
The importance of slots
Airports
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Frankfurt am Main International Airport
Passenger traffic -- No.1 in Germany; No.3 in Europe; No.8 worldwideCargo traffic -- the busiest airport in EuropeA 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 andLTU
Düsseldorf International Airport
The third largest airport in GermanyServes as the main hub for the airline LTU and as an importantsecondary hub for Lufthansa
Hamburg Airport
Germany's oldest airport in operationThe 4th biggest German airport
Berlin Tegel International Airport
Has the most scheduled flights among 3 Berlin Int'l airportsThe main base for Air Berlin and LTUTogether with Tempelhof International Airport, the 2nd oldest commercialairport in the world, would be replaced by Berlin-Brandenburg
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Operating services to 209 destinations in 81 countries. Together with its partnersLufthansa 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
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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
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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 Profilein € million
Revenue (+61%)
2,536 in 2007
1,575 in 2006
Net Profit
21 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
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Acquisition Based Growth
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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 (morethan 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
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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
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The Trend for the Future?
BusinessModels
Merge?
Low-costCarriers
TraditionalCarriers
TraditionalCarriers
Low-costCarriers
Full priceGood service
Low priceLimited Service
Low price, full service
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Thank you and have fun flying Lufthansa!
http://www.youtube.com/watch?v=6sEANBlWVy8
Any Questions?