This is the detailed analysis of Lufthansa Airline by applying the Ansoff matrix framework which has been used to identify the opportunities in the industry by growing existing market share, exploiting untapped markets, develop new products/services and diversification.
Market Penetration
According to CEO of German airlines “Lufthansa”, the company has recently repositioned its low-cost subsidiary, Euro wings in August 2019. The entire team has achieved strong and successful results 14.1million customers have traveled through Lufthansa, which shows 2.9% growth in contrast to August 2018. Even though the total number of flights is extended by 0.9% but still, the capacity and yields are enhanced by 1.8 and 2.7 percent respectively. Collectively in the month of August 106,794 flights were operated by the airline. An increase in the number of flights has proved that Europe has a strong competitive aviation market. The company report says that Zurich airport is the most rapidly growing channel of Lufthansa and 7.8 million customers have traveled from the European region only. Although, the number of travelers from Frankfurt international airport is very low as compared to Zurich because only 0.9% of travelers have been recorded from Frankfurt International Airport (FRA).
Product Development
Lufthansa is producing new product lines by utilizing parts of its old aircraft. Most often, airlines send expired or old aircraft to museums, graveyards in deserts or scrap them. Beyond this, some of them are moved to hotel gardens or underwater theme park. Regardless of it, another possibility is to upcycle the scrap by transforming it into a new different shape. Currently, Lufthansa is using this approach for the development of new product collection from its dematerialized A340-600. Upcycled products involve furniture, accessories, and models.
Product range entails, a rucksack originated from gray security cards, business class coverlets, pillow covers, a coffee table manufactured from the side panel of aircraft, and a wall bars developed from two front windows of A340-600. There were twenty wall clocks and all of them are currently out of stock.
The airline’s corporate designer states that the material and parts used in the up upcycling process are unique in its manner. Furthermore, the designer said that the company first gets inspiration from parts of old aircraft and develops new products with the help of various manufacturing experts.
According to the vice president of Lufthansa America, the airline has executed a fleet reimbursement plan by investing $1billion the company has successfully installed new state of art seat in the whole long haul fleet of each service class. Apart from it, the airline has invested 30billion in the order of new aircraft and new directions like Denver Munich. The best advantage of this reimbursement plan is that passengers of every class will enjoy the same standard of seating. Moreover, Lufthansa has introduced a new restaurant-style meal service for its business class passengers.
Market Development
In August 2019, the management of Lufthansa airline has declared to start new Euro wings long haul routes from summer 2020. With support from Lufthansa’s promotional strategy, the new Euro wing will take passengers to the United States and India through modern and newly invented aircraft. Before the execution of the operational program to new destinations, the airline is currently examining the marketing mix of Indian passengers who prefers to travel to Europe and the US. Moreover, it is expected to have enough passengers from both Europe and North America, which would bring profitable results for the airline. The company is analyzing the marketing mix of Indian passengers because dynamics have been changed. The IT firms are largely expanding their businesses in Europe and Germany. So, starting operations in new destinations of India would be a diversified mix, that would probably increase the sales growth of the airline. Currently, Lufthansa is operating 58flights from India including, Mumbai, Chennai, and Bengaluru. It is not easy for European airlines to generate profit from one region only and that is why Lufthansa had tried to operate in Calcutta and Hyderabad as well. So, the airline is operating on the western side of India and now intending to operate on another tier of cities to expand its growth.
Diversification
According to the company’s report, Lufthansa has decided to start operating its flight from various new directions/routes from Frankfurt and Munich in the future. New aircrafts A350-900 will be used to provide flight services into new routes. Besides this, code-sharing flights will be utilized with the subsidiary airline “Euro wings”, which operates throughAirbus A330.