TOP Five Challenges In The Airline Industry

Aviation is a critical part of our national economy, providing for the movement of people and goods throughout the world, enabling our economic growth. It 's a sector which is very vulnerable and affected by the global economic crisis and it 's facing several challenges during the recent years, which are presented below. TOP 5 Challenges in the Airline Industry.

1) The challenge of the Low-Cost Companies (LCCs): The ability to deliver cost efficiencies and productivity improvements is central to an airline 's competitiveness and success. The emergence of the no-frills, low-cost airlines (LCCs) has increased competition within the airline industry and ensured that existing airlines must improve their cost performance or face the risk of

As a matter of fact, the main goal of Lufthansa is to achieve an increasing company value and a profitable growth and customer satisfaction. Emphasizing more on details, their long-term strategy target is to be "Lufthansa – First choice". For that purpose, they use a strategic program "7to1 – Our Way Forward" which provide the main principles for the development of the company. By using the above-mentioned procedure, they want to ensure that certain action steps have to be followed in order to achieve the company 's goals and provide the future viability of the Lufthansa Group, by taking into consideration the key success factors of financial stability, market position, and fleet age. These steps are the

The strikes are opposed to the management decisions to cut cost in order to compete other low-cost companies ( LCC) like Easy-jet and Ryanair, as well as the fast-expanding Middle Eastern carriers.

The Union has decided to proceed with the strikes, despite the fact that they have been offered a one-off payment by 3.000 euros per person, the Union seems to be unwavering because the financial statements depict an increase in profits by 51% (which was originated partly because of the falling cost of fuel ) which is the main reason that proves the agreement to be difficult.

Mr. Spohr is determined to overcome the obstacles of the strikes and push ahead where previous management has a significant low degree of success or completely failed. Lufthansa 's CEO has planned a human resource strategy with a softly-softly approach to labor because in his opinion this is the key to a lower cost model. He tries "to disconnect the brand from the labor agreement" so he puts pressure to the unions because he wants to declare that growth is only possible when lower cost base occur. The labor cost is the competitive advantage for the sector of airline industry which Lufthansa has ignored the past years. So it 's the right time to re-examine the possibility for implementing further cut