STEP 1 VISION AND MISSION STATEMENTS, OBJECTIVE AND STRATEGIES Vision Lufthansa Global Telesales Cape Town is an innovative & leading Service-Provider for the Airline Industry worldwide which is sustainable, profitable and continuously growing to meet changing demands. Mission Lufthansa Global Telesales promises to offer solutions. We do this by delivering real value – giving our customers a true competitive edge, anytime, anywhere, in any language. Lufthansa Global Telesales achieves superior service and quality through continuous investment in our people, customers and technology.
Group strategy ? Worldwide air traffic remains a growth industry. ? We are set for profitable growth. ? The diversified structure of our Group has a stabilising effect on earnings. ? In 2010 we again intend to invest in modernising our fleet and making further improvements to our network quality. ? We strengthen our position in key markets with new partners. ? Our activities are focussed on a medium-term, sustainable perspective. ? A strong financial profile gives us the freedom of action to develop the Company. ? Committed to sustainable corporate development
Source: http://reports. lufthansa. com/2009/ar/groupmanagementreport/groupstrategy. html? cat=m Despite the turbulence that the ongoing financial and economic crisis has caused in their markets too, they are convinced that worldwide air traffic acts as a motor for the economy and for continued globalisation and therefore remains a growth industry. The strategy of the Lufthansa Group is therefore aimed at profitable growth, and pursues a course of sustainable corporate development and value creation. This benefits shareholders, customers and staff equally.
In an industry that is linked to the performance of the global economy, the Group can take advantage of the different cycles of its business segments. This has a stabilising effect on the profitability of the Group as a whole and thereby supports its sustainable development. Guidelines and strategic alignment International air transport is a growth industry. Economic growth and transporting passengers and cargo are interdependent. Along with a highly dynamic market governed by different trends in individual regions, the industry is influenced by a number of regulatory and structural changes. The trend towards consolidation is also ongoing.
In keeping with the Group’s guidelines, Lufthansa’s strategic alignment is aimed at generating profitable growth in this environment. In this process, profitability rather than growth is their priority. they are committed to shareholder value by way of sustainable value creation that they aim especially to achieve by concentrating on their core business, passenger transportation. Source: http://investor-relations. lufthansa. com/en/fakten-zum-unternehmen/group-strategy. html STEP 2 DEVELOP VISION AND MISSION STATEMENTS FOR LUFTHANSA AIRLINE Mission Lufthansa Global Telesales promises to offer solutions.
We do this by delivering real value – giving our customers a true competitive edge, anytime, anywhere, in any language. Lufthansa Global Telesales achieves superior service and quality through continuous investment in our people, customers and technology. Checklist for Nine (9) Mission Statement Components |SN |Component |Statement | |1 |Customer |We do this by delivering real value – giving our customers a true competitive edge, | | | |anytime, anywhere, in any language. |2 |Product or Services |Nil | |3 |Market |We do this by delivering real value – giving our customers a true competitive edge, | | | |anytime, anywhere, in any language. | |4 |Technology |Lufthansa Global Telesales achieves superior service and quality through | | | |continuous investment in our people, ustomers and technology. | |5 |Concern for survival, growth|Lufthansa Global Telesales achieves superior service and quality through | | |and profitability |continuous investment in our people, customers and technology. | |6 |Philosophy |Lufthansa Global Telesales achieves superior service and quality through | | | |continuous investment in our people, customers and technology. |7 |Self concept |We do this by delivering real value – giving our customers a true competitive edge, | | | |anytime, anywhere, in any language. | |8 |Concern for public image |Nil | |9 |Concern for employees |Lufthansa Global Telesales achieves superior service and quality through | | | |continuous investment in our people, customers and technology. |
Lufthansa Airlines meets 7 out of 9 elements of a good mission statement, therefore they can proceed with the existing mission statement. STEP 3 EXTERNAL AUDIT Opportunities 1. Global airline industry dominated by key players 2. Other companies are either in bankruptcy or bailed out by the government. 3. Africa’s 2nd largest Airline, with 8. 9 million passengers, is in alliance with Lufthansa in Star Alliance 4. Airline industry contributes half of the impact on global warming. 5. The share of C02 emission from air traffic might increase to approximant 20% in 2020 . Fuel for airlines is not taxed a point constantly raised in public criticism. 7. Lufthansa is in Star Alliance that has largest members of 18 Threats 1. First Iraq war reduced international air traffic. 2. Foreigners can own only 25% of an airline in US. 3. In non-European ownership is limited to 49% 4. Acquisition of airline in Asia is practically impossible. 5. Deregulation and AITA cartel allow score of new competitors. 6. Worldwide air passenger’s volumes fell by 3. 3 and 2. 4% in 2001/2003. 7. Fuel costs 26% of operatory cost in Europe airline . 40% held by foreigners’ diverse ownership. STEP 4 COMPETITIVE PROFILE MATRIX (CPM) | |Star Alliance |One World |Sky Team | |Critical Success Factors |Weight |Rating |Score |Rating |Score |Rating |Score | |Advertising |0. 08 |1 |0. 08 |1 |0. 08 |2 |0. 16 | |Service Quality |0. 2 |4 |0. 48 |2 |0. 24 |3 |0. 36 | |Price Competitiveness |0. 13 |2 |0. 26 |2 |0. 26 |2 |0. 26 | |Management |0. 08 |4 |0. 32 |2 |0. 16 |1 |0. 08 | |Financial Position |0. 14 |4 |0. 56 |2 |0. 28 |3 |0. 42 | |Customer Loyalty |0. 2 |3 |0. 36 |1 |0. 12 |2 |0. 24 | |Global Expansion |0. 15 |3 |0. 45 |2 |0. 30 |2 |0. 30 | |Market Share |0. 10 |4 |0. 40 |2 |0. 20 |3 |0. 30 | |E-Commerce |0. 08 |3 |0. 24 |1 |0. 08 |1 |0. 08 | |Total |1. 0 |3. 15 |1. 72 |2. 20 | STEP 5 EXTERNAL FACTORS EVALUATION (EFE) MATRIX |No |Key External Factors |Weight |Rating |Weighted Score | |Opportunities | |1 |Global airline industry dominated by key players |0. 10 |3 |0. 30 | |2 |Other companies are either in bankruptcy or bailed out by the government. 0. 07 |2 |0. 14 | |3 |Africa’s 2nd largest Airline, with 8. 9 million passengers, is in alliance with |0. 05 |4 |0. 20 | | |Lufthansa in Star Alliance | | | | |4 |Airline industry contributes half of the impact on global warming. |0. 08 |4 |0. 32 | |5 |The share of C02 emission from air traffic might increase to approximant 20% in|0. 07 |3 |0. 1 | | |2020 | | | | |6 |Fuel for airlines is not taxed a point constantly raised in public criticism. |0. 06 |2 |0. 12 | |7 |Lufthansa is in Star Alliance that has largest members of 18 |0. 10 |3 |0. 30 | |Threats | |8 |First Iraq war reduced international air traffic. |0. 08 |3 |0. 4 | |9 |Foreigners can own only 25% of an airline in US. |0. 07 |2 |0. 14 | |10 |In non-European ownership is limited to 49% |0. 04 |2 |0. 08 | |11 |Acquisition of airline in Asia is practically impossible. |0. 05 |1 |0. 05 | |12 |Deregulation and AITA cartel allow score of new competitors. |0. 08 |3 |0. 24 | |13 |Worldwide air passenger’s volumes fell by 3. and 2. 4% in 2001/2003. |0. 07 |4 |0. 14 | |14 |Fuel costs 26% of operatory cost in Europe airline |0. 04 |2 |0. 08 | |15 |40% held by foreigners’ diverse ownership. |0. 04 |3 |0. 12 | | |Total |1. 00 | |2. 68 | STEP 6 KEY EXTERNAL FACTORS Strengths 1. Lufthansa is the leading member of the largest alliance. 2.
They offer point to point connection on high traffic density routes. 3. Lufthansa transform his fixed cost into variable cost. 4. Cost base has been reduced by approx 40% despite rising wages 5. Promote direct booking via web with coy such as LH CENTER with 540 chain office in 49 countries in 2006 6. Maintain 10% of its own shares for the purpose of a reserve. 7. Net operating profit increase through star alliance above 500 million. 8. Since 1999, Lufthansa has been organised as a holding with six business line. 9. 28. 4% market share and 842 destinations in 152 countries.
Weaknesses 1. Passengers’ transportation turn over for row shrink for 18. 62 to 10. 12 from 1980 to 2000. 2. Overall annual transportation turn over reduce from 16. 22 to 7. 6 in 2005 with fluctuation to even 4. 0% negative. 3. Traffic turn over decrease between 2001 to 2003 by 4. 62% 4. Tension among employees as well as sometimes customers. 5. Sold 50% of its stake in Thomas cook. 6. Depreciation of airplanes is high than British Airways 7. Lufthansa does not provide an answer to the onslaught of the low-cost carriers 8. Approximately 20% of planes taken of operation in 2001
STEP 7 INTERNAL FACTORS EVALUATION (IFE) |No |Key External Factors |Weight |Rating |Weighted Score | |Strengths | |1 |Lufthansa is the leading member of the largest alliance. |0. 10 |4 |0. 40 | |2 |They offer point to point connection on high traffic density routes. |0. 05 |3 |0. 30 | |3 |Lufthansa transform his fixed cost into variable cost. |0. 6 |4 |0. 24 | |4 |Cost base has been reduced by approx 40% despite rising wages |0. 10 |4 |0. 40 | |5 |Promote direct booking via web with coy such as LH CENTER with 540 chain |0. 06 |3 |0. 18 | | |office in 49 countries in 2006 | | | | |6 |Maintain 10% of its own shares for the purpose of a reserve. |0. 04 |3 |0. 2 | |7 |Net operating profit increase through star alliance above 500 million. |0. 06 |4 |0. 24 | |8 |Since 1999, Lufthansa has been organised as a holding with six business line. |0. 03 |3 |0. 09 | |9 |28. 4% market share and 842 destinations in 152 countries. |0. 07 |3 |0. 21 | |Weaknesses | |1 |Passengers’ transportation turnover for ROW shrinks for 18. 2 to 10. 12 from |0. 08 |1 |0. 08 | | |1980 to 2000. | | | | |2 |Overall annual transportation turn over reduce from 16. 22 to 7. 6 in 2005 with |0. 05 |1 |0. 05 | | |fluctuation to even 4. 0% negative. | | | | |3 |Traffic turn over decrease between 2001 to 2003 by 4. 62% |0. 06 |2 |0. 12 | |4 |Tension among employees as well as sometimes customers. 0. 06 |2 |0. 12 | |5 |Sold 50% of its stake in Thomas cook. |0. 05 |1 |0. 05 | |6 |Depreciation of airplanes is high than British Airways |0. 04 |1 |0. 04 | |7 |Lufthansa does not provide an answer to the onslaught of the low-cost carriers |0. 05 |1 |0. 05 | |8 |Approximately 20% of planes taken of operation in 2001 |0. 04 |2 |0. 8 | | |Total |1. 00 | |2. 77 | STEP 8 1. SWOT Matrix | |Strengths |Weaknesses | | |1 |Lufthansa is the leading member of the|1 |Passengers’ transportation turnover for ROW | | | |largest alliance. | |shrinks from 18. 62 to 10. 12 from 1980 to 2000. | |2 |They offer point to point connection |2 |Overall annual transportation turn over reduce | | | |on high traffic density routes. | |from 16. 22 to 7. 6 in 2005 with fluctuation to even| | | | | |4. 0% negative. | | |3 |Lufthansa transform his fixed cost |3 |Traffic turn over decrease between 2001 to 2003 by| | | |into variable cost. |4. 62% | | |4 |Cost base has been reduced by approx |4 |Tension among employees as well as sometimes | | | |40% despite rising wages | |customers. | | |5 |Promote direct booking via web with |5 |Sold 50% of its stake in Thomas cook. | | |coy such as LH CENTER with 540 chain | | | | | |office in 49 countries in 2006 | | | | |6 |Maintain 10% of its own shares for the|6 |Depreciation of airplanes is high than British | | | |purpose of a reserve. |Airways | | |7 |Net operating profit increase through |7 |Lufthansa does not provide an answer to the | | | |star alliance above $500 million. |onslaught of the low-cost carriers | | |8 |Since 1999, Lufthansa has been |8 |Approximately 20% of planes taken of operation in | | | |organised as a holding with six | |2001 | | | |business line. | | | |9 |28. 4% market share and 842 | | | | | |destinations in 152 countries. | | | |Opportunities S-O Strategy |W-O Strategy | |1 |Global airline industry dominated by key |1 |Introduce more destinations to Africa |1 |Improve plane acquisition | | |players | |(Duala, Abuja, Lagos, Algiers, and | |W8,O3,7 | | | | |Cape Town, Cairo, Equatorial Guinea) | | | | | | |(S 1,4,5,6,7, O 3,2,7,) | | | |2 |Other companies are either in bankruptcy or |2 |Acquire some airlines in process of |2 |Improve/new routes to ROW | | |bailed out by the government. |bankruptcy (S6,7,9 O2,7) | |W1,2,3O1,3,6 | |3 |Africa’s 2nd largest Airline, with 8. 9 | | | | | | |million passengers, is in alliance with | | | | | | |Lufthansa in Star Alliance | | | | | |4 |Airline industry contributes half of the | | | | | | |impact on global warming. | | | | |5 |The share of C02 emission from air traffic | | | | | | |might increase to approximant 20% in 2020 | | | | | |6 |Fuel for airlines is not taxed a point | | | | | | |constantly raised in public criticism. | | | | | |7 |Lufthansa is in Star Alliance that has | | | | | | |largest members f 18 | | | | | |Threats |S-T Strategy |W-T Strategy | |1 |First Iraq war reduced international air |1 |Acquire some Africa’s Airlines in | |Issue new stock to shareholders | | |traffic. | |distress (S2, 3,6,7 T4,5,7) | |W1,2,8 T2,3,4,8 | |2 |Foreigners can own only 25% of an airline in |2 |Withdraw from AITA membership | |Offer low cost transportation | | |US. |(S1,2,3,9, T5,8,) | |W1,8 T6,7 | |3 |In non-European ownership is limited to 49% |3 |Offer discount to passengers departing| | | | | | |from middle-east (S2,3,6, T1,7,) | | | |4 |Acquisition of airline in Asia is practically| | | | | | |impossible. | | | | | |5 |Deregulation and AITA cartel allow score of | | | | | | |new competitors. | | | | | |6 |Worldwide air passenger’s volumes fell by 3. 3| | | | | | |and 2. 4% in 2001/2003. | | | | |7 |Fuel costs 26% of operatory cost in Europe | | | | | | |airline | | | | | |8 |40% held by foreigners’ diverse ownership. | | | | | 2. SPACE MATRIX Y axis Financial Strength+5Y axes: 5 + (-3) = 2 Environmental Stability-3 X axis Industrial Strength2X axis: 2+ (-1) = 1 Competitive Advantage-1 FS CAIS ES 3. BCG MATRIX Lufthansa Divisions’ Position based on Operating Results [pic] Operating results by segment 2007- 2009 Financial Year |Passenger Airline |Logistics |MRO |Catering |IT, Other, & |Group | | | | | | |Consolidation | | | |EUR ‘000,000 | |2007 |826 |136 |293 |100 |23 |1,378 | |2008 |789 |164 |299 |70 |-42 |1,280 | |2009 |-8 |-171 |316 |72 |-79 |130 | [pic] Lufthansa group’s revenue base consists primarily of four divisions as follows: Passenger Airline Group, or the passenger division (72. 8% of the group’s external 2009 revenues) is the third-largest in the world and is the largest in Europe in terms of passenger numbers, with EUR16. 2 billion in external revenues.
Following a series of acquisitions in recent years, the division now comprises a number of branded airlines apart from Lufthansa, including Swiss International Airlines (fully consolidated since July 2007), Austrian Airlines (acquired in September 2009) and bmi (fully owned as of November 2009, prior to which Lufthansa had a majority stake as of July 2009). In July 2009, Lufthansa also acquired a 45% stake in Brussels Airlines (now equity consolidated). Lufthansa Cargo (8. 7% of group revenues) is the third-largest cargo airline in the world behind Korean Air Cargo and Cathay Pacific Cargo , measured by freight transported in tonne-kilometres.
In 2009 the division became more dependent on emerging markets in light of the downturn in mature markets. Lufthansa Technik (“the MRO division”) (10. 3% of group revenues) is the world’s leading supplier of engineering services for civil aircrafts. The division has approximately 690 customers and a global market share of around 16%. LSG Sky Chefs (the catering division) (7. 1% of FY09 revenues) is a leading airline caterer, alongside Gate Gourmet (rated B2 stable). LSG Skychefs estimates its global market share to be about 30%. The division generated EUR1. 5 billion in sales in FY 2009. IT services 1. 1% revenue contribution 4. QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM) Key Internal Factors |Improve/new routes |Introduce more Africa | | |to ROW |destinations *** | |SN |Strength |Weight |AS |TAS |AS |TAS | |1 |Lufthansa is the leading member of the largest alliance. |0. 10 |4 |0. 40 |4 |0. 40 | |2 |They offer point to point connection on high traffic density routes. |0. 05 |2 |0. 10 |2 |0. 10 | |3 |Lufthansa transform his fixed cost into variable cost. |0. 06 |2 |0. 12 |1 |0. 6 | |4 |Cost base has been reduced by approx 40% despite rising wages |0. 10 |2 |0. 20 |4 |0. 40 | |5 |Promote direct booking via web with coy such as LH CENTER with 540 chain|0. 06 |3 |0. 18 |2 |0. 12 | | |office in 49 countries in 2006 | | | | | | |6 |Maintain 10% of its own shares for the purpose of a reserve. |0. 04 |3 |0. 18 |4 |0. 16 | |7 |Net operating profit increase through star alliance above $500 million. |0. 06 |3 |0. 18 |4 |0. 4 | |8 |Since 1999, Lufthansa has been organised as a holding with six business |0. 03 |- |- |- |- | | |line. | | | | | | |9 |28. 4% market share and 842 destinations in 152 countries. |0. 07 |3 |0. 21 |3 |0. 21 | | |Weaknesses | | | | | | |1 |Passengers’ transportation turnover for ROW shrinks from 18. 62 to 10. 12 |0. 08 |4 |0. 32 |4 |0. 32 | | |from 1980 to 2000. | | | | | |2 |Overall annual transportation turn over reduce from 16. 22 to 7. 6 in 2005 |0. 05 |4 |0. 20 |4 |0. 20 | | |with fluctuation to even 4. 0% negative. | | | | | | |3 |Traffic turn over decrease between 2001 to 2003 by 4. 62% |0. 06 |3 |0. 18 |4 |0. 24 | |4 |Tension among employees as well as sometimes customers. |0. 06 |2 |0. 12 |4 |0. 24 | |5 |Sold 50% of its stake in Thomas cook. |0. 05 |2 |0. 10 |3 |0. 5 | |6 |Depreciation of airplanes is high than British Airways |0. 04 |2 |0. 08 |2 |0. 08 | |7 |Lufthansa does not provide an answer to the onslaught of the low-cost |0. 05 |1 |0. 05 |1 |0. 05 | | |carriers | | | | | | |8 |Approximately 20% of planes taken of operation in 2001 |0. 04 |3 |0. 12 |2 |0. 08 | | |Subtotal |1. 00 | |2. 74 | |3. 5 | |Key External Factors | | | |SN |Opportunities |Weight |AS |TS |AS |TS | |1 |Global airline industry dominated by key players |0. 10 |3 |0. 30 |3 |0. 40 | |2 |Other companies are either in bankruptcy or bailed out by the government. |0. 07 |4 |0. 28 |3 |0. 28 | |3 |Africa’s 2nd largest Airline, with 8. 9 million passengers, is in alliance |0. 05 |4 |0. 20 |4 |0. 0 | | |with Lufthansa in Star Alliance | | | | | | |4 |Airline industry contributes half of the impact on global warming. |0. 08 |- |- |- |0. 32 | |5 |The share of C02 emission from air traffic might increase to approximant |0. 07 |- |- |- |- | | |20% in 2020 | | | | | | |6 |Fuel for airlines is not taxed a point constantly raised in public |0. 06 |1 |0. 6 |2 |0. 18 | | |criticism. | | | | | |7 |Lufthansa is in Star Alliance that has largest members of 18 |0. 10 |3 |0. 30 |2 |0. 30 | | |Threats | | | | | | |1 |First Iraq war reduced international air traffic. |0. 08 |- |- |- |- | |2 |Foreigners can own only 25% of an airline in US. |0. 07 |- |- |- |- | |3 |In non-European ownership is limited to 49% |0. 04 |4 |0. 16 |2 |0. 2 | |4 |Acquisition of airline in Asia is practically impossible. |0. 05 |4 |0. 20 |2 |0. 20 | |5 |Deregulation and AITA cartel allow score of new competitors. |0. 08 |- |- |- |- | |6 |Worldwide air passenger’s volumes fell by 3. 3 and 2. 4% in 2001/2003. |0. 07 |2 |0. 14 |3 |0. 28 | |7 |Fuel costs 26% of operatory cost in Europe airline |0. 04 |4 |0. 16 |1 |0. 12 | |8 |40% held by foreigners’ diverse ownership. |0. 04 |2 |0. 08 |2 |0. 6 | | |Subtotal |1. 00 | |2. 42 | |2. 56 | *** (Duala, Abuja, Lagos, Algiers, and Cape Town, Cairo, Equatorial Guinea) STEP 9 Specific Strategy Recommendation We recommend that Lufthansa to provide more destinations in to Africa which is market development to cover the gap of their passengers turn over decrease in rest of the world, as African market is growing fast with over 3. 8 million passengers carried in 2007. As figures shows that Duala 6,027, Abuja 8,088, Lagos 7,207, Algiers5,149, and Cape Town5,033, Cairo4,007, Equatorial Guinea1,121. with the increase of 11. percent improvement in 2008 and 21. 9 percent in 2009. Advantage of Lufthansa Going to Africa 1. Lufthansa could lead to an increase of tourists to Africa and the creation of new business opportunities. Trade could also benefit through the availability of new airfreight links. 2. Introducing an airline in competition with existing airlines will increase consumer choice and convenience of travel due to a higher number of flights available per week. The enhanced airline competition should lead to lower airfares. 3. The free exchange of traffic rights will increase the attractiveness of major airports and may assist in developing such airports into significant regional hubs. 4.
Reciprocal exchange and exercise of traffic rights will benefit African airlines through the creation of additional opportunities to convey traffic, provided rights can be obtained from the relevant countries. 5. Services conducted on a basis will stimulate the market which could ultimately lead to the introduction of air services on a basis. 6. No barriers to entry as any number of airlines may participate through the principle of multiple designations. 7. No operating restrictions through unrestricted access to entry points, capacity and flight frequencies (first to sixth freedom traffic rights, seventh freedom for all-cargo services and open route schedules). 8.
Creates competition, leading to efficient services 9. Potential benefits for consumers: More choice, better connections and lower fares. Disadvantages 1. It is not advisable for States to become too dependent on foreign airlines services to serve their needs. National interest is best served by local airlines over which the relevant state has direct control. 2. Carriers may erode the home base of local airlines to the extent that the local airline industry may collapse. 3. Due to the different level of development of the airlines participating in an open skies agreement, competition can become unfair (actual or perceived) due to activities of dominant carriers. 4.
Due to delays normally experienced in the adjudication of complaints filed with the relevant competition authorities, the weaker airline(s) may suffer irreparable damage. 5. Shift in market share between foreign and African airlines due to activity with no ability to intervene, should such action be deemed necessary 6. There are potential job losses due to African airlines not able to compete with stronger foreign airlines, which could lead to protest by African Union 7. Consolidation of airlines to face competition (mergers, reduction of job opportunities). Long-Term Objective: Lufthansa main objective should be to provide Africa with standard, consistent and affordable airline services. Costs: Estimate the total funding requirements at around $60 million.
This takes into account the minimum cash requirements to satisfy the ACAA. 2010 2011 2012 Number of air craft 4 6 9 Start-up costs, 12m 18 m 25m The on-going operating costs, 6m 7. 5m 8. 5m When compare Lufthansa’s strategy with the actual strategy of the company you may find out that among the objectives of Lufthansa is to operate worldwide so been start operation in Africa will be as a major step forward STEP 10 Implementation of Recommendations
Lufthansa will initially target the high volume routes in which it will only be among key player and not be perceived a real threat to the African airlines. The following African cities are obvious targets: Duala, Abuja, Lagos, Algiers, and Cape Town, Cairo, Equatorial Guinea. However, the medium term objective is not to increase capacity on these large routes but rather to focus on medium to low density routes where competitors flying wide-body equipment will not be able to operate profitably. With that recommend implementation we are expecting a perfect result as some African airline are more engage on local transportations. Pro forma financial cash flow |2010 |2011 |2012 |2013 |2014 | | |($’000) |($’000) |($’000) |($’000) |($’000) | |Expected revenue |11,070 |13,090 |15,120 |16,200 |19,240 | |Other revenue | 2,872 |3,006 |3,066 |3,130 |3,319 | |Total expected revenue |13,942 |16,096 |18,186 |19,330 |22,559 | |Changes in inventories |178 |189 |200 |215 |220 | |Expected operating income |2,969 |2344 |2368 |2379 |2400 | |Cost of materials and services |3,121 |3,000 |2,978 |2,975 |2,970 | |Staff costs |2,084 |2,088 |2,090 |2,100 |2,105 | |Depreciation, within that years | 1,489 |1,527 |1,532 |1,540 |1,544 | |Other financial items | 427 |445 |473 |490 |500 | |Dividends | 514 | |518 |522 |525 | |Expected Profit for the years | 14,376 |15,547 |15,843 |16,170 |16,280 | Actions Time Table a. Studying the destinations and supervision of the airports b. Designing and signing of memorandum with possible destinations bodies c. Promotions to create environmental awareness and adverts d.
Coming out with the plight schedules e. Cross checking of the schedules and operations matters f. Start take up STEP 11 ANNUAL OBJECTIVES FOR 2010 TO 2014 Year 1: 1. Signed alliance agreements with 5 African Airlines namely i. Egypt Air ii. Sudan Airlines iii. Air Nigeria iv. Air Afrique v. Djibouti Airways 2. Integrate aligned airlines booking systems to harmonised passenger itineraries 3. Employ crews of Africa origin Year 2: 1. Introduce more destinations to Africa region 2. Improve other regions’ flight frequency to avoid passenger long transit 3. Partner with Hotels in strategic cities in Africa Year 3: 1. Acquire alliance’s members’ competitors in the region 2.
Expand operations of members to capture more market by way of offers and promotions 3. Engage Africa local celebrity to endorse the Lufthansa Airline Year 4: 1. Expand the alliance to capture 5 more Africa airlines in to the alliance 2. Net operating income to increase by 50% 3. Save 20% cost on passenger transit hotel stay, by way of rapid passenger transfer Year 5: 1. Procure new planes for the members in alliance on lease basis 2. Harmonize safety procedures through training of crew members 3. Establish Lufthansa African Care, a social responsibility initiative that caters for the education of less privilege children in Africa POLICIES 1. Recruitment a.
Recruitment of Crew will constitute of 40% African origin, especially countries of Lufthansa operations. b. Candidates must be fluent in English and their respective countries local languages of at least three different languages. c. Applicants must have university degree in any field, provided it is 2nd class upper and above. d. Recruitment should be based on 60-40 combination of females and males respectively. e. Successful candidates will be given training accordingly 2. Entitlements a. Remunerations will be USD based b. Annual leave entitlements be based on years of service in the company, i. 1-3 years-15 working days ii. 4-8years-20 working days iii. 8-10years-25 working days iv. >10years-30 working days c.
Insurance: all crew staff are entitled to life insurance in an event of lost of life or permanent disability. d. Management staffs are entitled to 40% discounts on fares, while the rest are entitled to 20% discount. e. Crew members are entitled to a 5 star hotel stay while transit last. 1 Pension and retirement provisions Retirement provisions are an important topic even for young professionals. Aside from a company pension scheme, Lufthansa also offers a “Lufthansa Private Pension”, so that later after your working years you can enjoy your retirement without a care. STEP 12 Strategy Evaluation Framework [pic] The above strategy evaluation framework is used to conduct the strategy evaluation process in Lufthansa.
