On the German passenger market, airlines approach different business concepts in order to cope with the threats and to be successful. The case of the Lufthansa Passenger Airline and its subsidiary Germanwings has been discussed many times currently. Together they have implemented a restructured concept of the Low Cost Carrier Germanwings in order to overcome their weaknesses. The purpose of this paper is to evaluate the potential of economic success of this strategy change. Therefore, the paper comprises three main areas. The first one is the theoretical part, which explains the differences between Full Service Network Carriers, Low Cost Carriers, Regional Carriers and Leisure Carriers. Secondly, the analysis takes place by applying Porter’s five forces model. Subsequently, the strengths and weaknesses of the Lufthansa Passenger Airline and Germanwings are highlighted and the new business concept is introduced. Finally, all findings are put into relation using the SWOT-analysis.
Table of Contents
1 Introduction
1.1 Research Objectives
1.2 Overview of the Study
1.3 Research Methodology
2 Strategic Airline Marketing
2.1 The Classical Marketing and the Marketing Management Process
2.2 The Marketing Mix Applied by Airlines
2.2.1 Product Policy
2.2.2 Price Policy
2.2.3 Place Policy
2.2.4 Promotion Policy
3 Applied Business Concepts of Airlines
3.1 Full Service Network Carriers
3.1.1 Marketing Mix
3.1.2 Advantages and Disadvantages
3.2 Low Cost Carriers
3.2.1 Marketing Mix
3.2.2 Advantages and Disadvantages
3.3 Regional Carriers
3.3.1 Marketing Mix
3.3.2 Advantages and Disadvantages
3.4 Leisure Carriers
3.4.1 General Characteristics
3.4.2 Marketing Mix
3.5 Interferences of the Business Concepts
4 Analysis of the German Passenger Airline Market – Porter’s Five Forces
4.1 Rivalry among Existing Competitors
4.1.1 Competition among Low Cost Carriers
4.1.2 Full Service Network Carriers and Strategic Alliances
4.1.3 Differentiation of Products and Services
4.1.4 The German Passenger Airline Market in Europe
4.2 Threat of New Entry
4.2.1 Entry Barriers through Slot Allocation Regulations
4.2.2 The Liberalization of European Air Traffic
4.2.3 Subsidies at Regional Airports
4.2.4 The Elimination of Further Subsidies via the Aviation Tax Act
4.2.5 Competitive Disadvantages Through Emission Trading
4.2.6 Relatively High Capital and Resource Requirements
4.3 Threat of Substitute Products and Services
4.3.1 Intermodal Competition by Road and Rail
4.3.2 Substitution Through New Media
4.4 Bargaining Power of Suppliers
4.4.1 The Power of Aircraft Manufacturers
4.4.2 The Bargaining Power of Airports
4.4.3 Global Distribution Systems
4.5 Bargaining Power of Buyers
4.5.1 The Number of Buyers
4.5.2 Switching Costs
4.6 Analysis of the Results of Porter’s Five Forces
5 The Demand within the German Passenger Airline Market
5.1 Business and Private Traveler in the Decision-Making Process
5.2 Development of the Passenger Demand in Germany
5.2.1 Development from 2001 to 2013 and Forecast
5.2.2 The Development of Business and Private Travel
6 The Case of Lufthansa and Germanwings
6.1 The Lufthansa Group
6.2 The Lufthansa Passenger Airline Group and its Business Performance
6.3 Business Performance of the Lufthansa Passenger Airline
6.4 The Subsidiary Germanwings and its Business Performance
7 The SWOT-Analysis applied for Lufthansa and Germanwings
7.1 The New Germanwings – a Strategy Change
7.2 Evaluation of the New Strategy in Accordance to the SWOT-Analysis
8 Conclusion and Recommendations
Research Goal and Focus
This master thesis investigates the strategic marketing concepts of airlines operating in the German passenger market and evaluates the potential economic success of the strategy change implemented by the Lufthansa Passenger Airline and its subsidiary Germanwings.
- Strategic marketing and marketing mix in the airline industry.
- Business concepts of Full Service Network Carriers (FSNC) and Low Cost Carriers (LCC).
- Market analysis using Porter’s Five Forces model.
- Demand patterns of business and private travelers in Germany.
- Case study and SWOT analysis of the new Germanwings strategy.
Excerpt from the Book
3.1 Full Service Network Carriers
Full Service Network Carriers can be divided into Mega Carrier or Major Carrier, Continental Carrier, and Flag Carrier according to their market position and to their political status. Mega or Major Carriers are the market leaders seen from a commercial point of view. They are operated privately and serve intercontinentally. Some organizations even state a certain turnover, which has to be achieved by an airline in order to reach the status of a Mega Carrier. They are the leader of global alliances. Flag Carriers, in comparison, are partially held by the government, which in return can implement its politics and achieve different goals, such as the provision of jobs or different routes. Through subsidies, Flag Carriers are usually able to hold their leading position, even though they are most likely not known for achieving their market leadership through their operations. Continental Carriers are usually smaller and operate on selected routes only. They play a secondary role for global alliances.
The concept of FSNC is known as the oldest airline business concept. Most of the biggest airlines worldwide, such as Emirates, Lufthansa, or United Airlines, are operating as FSNC. They usually serve line hauls in hub-and-spoke systems to domestic, continental, and intercontinental central airports, which are located in big cities and offer intermodal connections as well. Besides, some FSNC approach to regional airports, too. The aircrafts are usually built by the two market leaders Airbus and Boeing and offer a capacity ranging from 130 to 800 seats. The fleet of an FSNC is known to be heterogeneous due to different distances, which need to be flown, and shifts in demand, which need to be tackled. Business and private travelers are their target groups, whereas business travelers build the core target group.
Summary of Chapters
1 Introduction: Provides the research objectives and explains the inductive methodology used to analyze the current German passenger airline market.
2 Strategic Airline Marketing: Explores the theoretical fundamentals of marketing, focusing on the marketing mix (product, price, place, promotion) applied to airlines.
3 Applied Business Concepts of Airlines: Describes the different airline business models including FSNC, LCC, Regional Carriers, and Leisure Carriers, detailing their specific marketing mixes.
4 Analysis of the German Passenger Airline Market – Porter’s Five Forces: Applies Porter’s model to evaluate market attractiveness, covering competition, new entrants, substitutes, and bargaining power of suppliers and buyers.
5 The Demand within the German Passenger Airline Market: Examines decision-making criteria for business and private travelers and analyzes historical passenger demand trends.
6 The Case of Lufthansa and Germanwings: Investigates the business performance of the Lufthansa Group, the Lufthansa Passenger Airline, and the subsidiary Germanwings.
7 The SWOT-Analysis applied for Lufthansa and Germanwings: Performs a SWOT analysis of the new Germanwings business strategy and evaluates its potential for future success.
8 Conclusion and Recommendations: Synthesizes findings and offers final assessments on the competitiveness of the new business strategy.
Keywords
Strategic Marketing, Airline Industry, German Passenger Market, Full Service Network Carrier, Low Cost Carrier, Lufthansa, Germanwings, Porter's Five Forces, Marketing Mix, SWOT Analysis, Aviation Tax, Passenger Demand, Business Travel, Market Entry Barriers, Competitive Advantage.
Frequently Asked Questions
What is the core focus of this master thesis?
The thesis focuses on the strategic marketing concepts used by airlines in the German passenger market, specifically analyzing the recent business model transformation of the Lufthansa Passenger Airline and its subsidiary Germanwings.
What are the primary business models examined in this study?
The study evaluates four main carrier types: Full Service Network Carriers (FSNC), Low Cost Carriers (LCC), Regional Carriers (RC), and Leisure Carriers (LC).
What is the primary research question?
The main objective is to evaluate the potential for economic success of the restructured business concept applied by the Lufthansa Passenger Airline and Germanwings in order to overcome existing weaknesses and maintain competitiveness.
Which scientific method is applied?
The thesis utilizes an inductive research method, combining literature reviews on strategic marketing theory with quantitative and qualitative analysis using tools like Porter’s Five Forces and SWOT analysis.
What content is covered in the main section of the paper?
The main section includes a theoretical overview of airline marketing, a competitive analysis of the German market, an investigation of passenger demand factors, and a detailed performance analysis of the Lufthansa Group and Germanwings.
Which keywords best describe this research?
Key terms include Strategic Marketing, German Airline Market, Lufthansa, Germanwings, Low Cost Carriers, Porter’s Five Forces, and SWOT Analysis.
How does the author view the competitiveness of the new Germanwings strategy?
The author expresses skepticism, arguing that while the new concept aims to leverage brand strengths, it may overlook significant market threats like intense price competition and the commoditization of the LCC model.
Does the thesis consider the impact of environmental policies on airlines?
Yes, the thesis discusses market entry barriers and costs related to the Aviation Tax Act and European emission trading schemes as significant challenges for airline profitability.
- Arbeit zitieren
- Susanne Bölke (Autor:in), 2013, Strategic Marketing Concepts of Airlines in the German Passenger Market. Present Challenges, München, GRIN Verlag, https://www.hausarbeiten.de/document/271090
