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Air Transportation Case Study

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OVERALL PHASES OF ECONOMIC INTEGRATION

The development in the air transport sector can overall be described through the three packages from the EU, with the aim of liberalizing and integrating the sector and reaching a common market. The common contents of all packages are the license to operate, access to market and rules relating to price setting and competition.

Previously, the air sector industry was characterized by several larger national airlines set up as “full service network carriers. ” A full service network carrier is an airline that focuses on providing a wide range of pre-flight and onboard services, including different service classes, and connecting flights. Also these types of airlines often have obligations and responsibilities …show more content…

The German company, Lufthansa AG, is operating under the mission of providing passenger and cargo air transportation services worldwide. The Company offers flight and connection programs in cooperation with Star Alliance airline partners from North America, Scandinavia, and Asia. The Star Alliance is.. Lufthansa also provides travel agency, catering, and aircraft maintenance services and thereby navigates under a hub-and-spoke business model.

Right-sizing for the Air Transport Sector – effects from the changing circumstances

Right-sizing for Lufthansa – effects from the changing …show more content…

This has also had its impact on Lufthansa. Earlier this year the strikes in Lufthansa made it to a new level and pilots were striking, causing severe losses for Lufthansa.

To bring in some fresh news on the area, late September 2014, Lufthansa pilots resumed strikes. The pilots press to maintain their retirement benefits, which is clear example of some of the challenges Lufthansa is meeting in when trying to increase profits, by decreasing costs and smoothening the business. Lufthansa and the employed pilots have spent weeks negotiating the compensation scheme and also the time the flight captains leave and their official retirement age. The strikes have reduced profit by about 100 million euros so far this year, Lufthansa has announced .

ADAPTING THE BUSINESS CONCEPT TO REGULATORY TRENDS

The ownership structure of Lufthansa before liberalization was 82% ownership of the Federal Government in 1985. Today Lufthansa is 100 % privatized and the ownership structure is only one of the examples in which Lufthansa has adapted the business concept to the regulatory trends in the European legal landscape.

ADAPTING ORGANIZATION CONCEPT TO ACHIEVE THE BUSINESS

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