Research Paper

Submitted By ausdasher
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General Environment Analysis:

1. Global
A global standpoint Lufthansa facilitates economic growth, world trade, international investment and tourism; thus, central to the globalization taking place in many other industries. (Report 2011) a. Environmental catastrophes and political unrest
The earthquake and nuclear catastrophe in Japan during 2011 and the political unrest in the Middle East and Africa region had a severe effect on the course of business of Lufthansa as a group of companies. The cancellation of connections to and from Tokyo mainly impacted Lufthansa Passenger Airlines and Lufthansa Cargo, it was bmi (British Midland International). The Austrian Airlines in particular suffered from the temporary suspension of flights to some destinations in North Africa. Moreover European debt crisis, record-high fuel prices, the German aviation tax and the night-flight ban in Frankfurt burdened the business performance of Lufthansa in 2011. b. New air traffic tax depresses passenger business
The air traffic tax on flights from Germany introduced at the beginning of the financial year (2010-2011) made ticket price for German travelers more expensive. This was a particular burden on the traffic figures at German wings in 2011, as passengers in border regions of German chose to fly from airports abroad in some cases. Austrian Airlines is similarly affected by the new air traffic tax in Austria. c. Fleet modernisation progressing with new orders
The Supervisory Board approved orders for new aircraft during the year 2010-11. As well as 30 planes from the Airbus A320neo family were bought, the decision also covered deliveries of two additional Airbus A380s and five Boeing 777F freighters. This advances the fuel-efficient modernisation and expansion of the Lufthansa Group fleet. Altogether the orders in 2011 were of 47 new aircrafts in total with a list price of EUR 4 billion, that are to be delivered successively from 2012. d. Lufthansa signs contract for the sale of bmi
On 22 December 2011, Deutsche Lufthansa AG and International Airlines Group (IAG) signed an agreement on the sale of bmi to IAG. The gross purchase price is GBP 172.5 million in cash (around EUR 207million). Taking the agreed adjustments into account, however, the net purchase price is expected to be significantly negative. With the transaction Lufthansa is disassociating from a sustainably loss-making subsidiary. Closing of the deal is targeted for the year 2012.

2. Demographics
People from 141 nations contribute to the Lufthansa Group of company’s success every day. They comprise from various cultures and ethnic backgrounds and belong to different age groups. The average of the Lufthansa employees was 40.8 years during the 2011 as indicated in the annual report 2012. This diversity among its personnel is decisive for the company in its quest to secure its favourable competitive position over the long term.
Customers have been differentiated by business related attributes such as their purchase history. Customer segments have also been identified according to the profitability and different service level requirements and expectations. Each service offerings are tailored differently to each of the segments. 3. Sociocultural
Socio-cultural factors result from an underlying socio-cultural value system. Human beings hold sets of certain values, which can be identified at individual, collective and universal level. These values demonstrate themselves in attitudes and habits (Hofstede 2001). (Alasdair Reid) Socio-cultural factors normally describe geographically defined communities.
Lufthansa continues to orient itself by internationally accepted conventions on environmental protection and employee safety, legal requirements concerning the fight against corruption, and security regulations in information processing. Suppliers that do not accept these contractual clauses are not admitted to Lufthansa’s circle of
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