HAM1981
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What Makes LH Successful?

Mon May 24, 2010 10:56 pm

I am asking my self this question and want to know what your opinion is!

What makes LH success? Why can they manage to have so many subsidiary and others don´t ?

Is it only good Management ?

I read here very often ... LH does´nt have PTW and they are not good in this and that!

What do you think ?
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aznmadsci
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RE: What Makes LH Successful?

Mon May 24, 2010 11:21 pm

Quoting HAM1981 (Thread starter):
LH does´nt have PTW and they are not good in this and that!

Quick question, what is PTW?
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wn700driver
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RE: What Makes LH Successful?

Mon May 24, 2010 11:24 pm

I would say diversification is a good bit of it.

LHTecknik is a dominant figure in its industry, LH Cargo does pretty great too. I think they're a relatively conservative airline, but they're not as stagnant as say AA, and occasionally try new things out. They keep what works, do the best they can at it. Which is often also the best the industry can to boot.
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L1011Lover
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RE: What Makes LH Successful?

Mon May 24, 2010 11:28 pm

Quoting aznmadsci (Reply 1):
Quick question, what is PTW?

typo

he meant PTV

very obvious...
 
Talaier
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RE: What Makes LH Successful?

Mon May 24, 2010 11:32 pm

LH has a very strong exporting economy that supports business pax (and indeed leisure) as well as cargo to pretty much anywhere in the world. Add to that their extensive alliance and feeding flights from European partners and the fact that they use two reasonably sized and well-runned hub airports and you've got most of your answer. The rest of it is probably down to good industrial relations and it's huge size (=economies of scale).

However, I do think that further consolidation in Europe and especially Asia is going to provide a new breed of airlines that will no doubt make LH's life tough.
 
LipeGIG
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RE: What Makes LH Successful?

Tue May 25, 2010 1:23 am

Quoting Talaier (Reply 4):
LH has a very strong exporting economy that supports business pax (and indeed leisure) as well as cargo to pretty much anywhere in the world. Add to that their extensive alliance and feeding flights from European partners and the fact that they use two reasonably sized and well-runned hub airports and you've got most of your answer. The rest of it is probably down to good industrial relations and it's huge size (=economies of scale).

I would complement saying LH is the flag carrier of a country that is the King of Foreign Trade. With all types of industries and services, Germany also developed a very strong "brand" and recognition for quality that drives up demand for their products and services. Also, they have been very successful in installing subsidiaries around the world, which provide a strong business and VFR component.

LH is the airline that take the most advantage from it, was more focused in keep their long haul product than to fight for domestic and regional operations (in my view), and keep updating it's product while continues to have crews that make the difference.
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EDICHC
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RE: What Makes LH Successful?

Tue May 25, 2010 2:55 pm

Quoting wn700driver (Reply 2):
I think they're a relatively conservative airline,

Where I think LH can be trusted as a brand is that they are very consistent. To me they are not THE best in terms of service for my money that would be SQ. But LH are good and consistent and way ahead of any European competition.
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huaiwei
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RE: What Makes LH Successful?

Tue May 25, 2010 3:00 pm

And they take global alliances seriously. Very seriously, much more seriously than some of its competitors like BA who seems only interested in cornering the Anglo-sphere market. For this reason, therefore, you find LH working hard to build a presence in the growth markets of the world, flying to far more destinations in Asia than any other European carrier baring a combined AF/KL, who is only slightly ahead in some markets, and forming film partnerships with other carriers to connect to its global network.
It's huaiwei...not huawei. I have nothing to do with the PRC! :)
 
PanHAM
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RE: What Makes LH Successful?

Tue May 25, 2010 3:14 pm

LH is, meanwhile, a European carrier however with a base in an economically strong country. But that's not even half the rent.

It's the people actually, they can select from the best on the market as they have a good number of applicants for each job opening. They breed their own middle management since decades "Luftverkehrskaufmann" is a traineeship where young people are trained in various jobs inside the company, in Germany and oversaes. They move around various bases in that time. . That takes three years for the degree and meanwhile studies at the European Business School in Wiesbaden are included in that course. These people form the backbone of the company. Same as the pilots who are all trained inside the company. For top management careers, they can select from the most brilliant University graduates.
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connector4you
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RE: What Makes LH Successful?

Tue May 25, 2010 7:11 pm

It’s really not that complicated to be successful if you really work hard and put the market demand at the core of your operational schedule as opposed to do very little and just speculate yields on markets with little or no competition.

Lufthansa managed to become the airline that offers multiple options, at reasonable prices as opposed to “this is where, when and how we fly and expect you to bid an arm and leg for one of our seats”.

That’s why Lufthansa is reasonably perceived as a consistent airline when compared with those who alter their routes and destinations every other month in pursuit of seasonal higher yields.
 
123
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RE: What Makes LH Successful?

Tue May 25, 2010 7:34 pm

LH is constant in quality since decades. Maybe some other airlines are punctually better in determined categories, but when you fly LH, no matter from where to where (for example in my case often Brazil-Asia), you simply know what to expect. Here, we are not talking about elegance or frills. We are talking about quality at the continuous "service line" starting with booking and ending with baggage handling at destination.

Other pluspoint worked out well by them is the miles + more benefits for frequent travelers. It´s simply a very good program, and attracts frequent travelers due to the frills it offers.

Naturally safety is a leading point as well: LH is among the safest airlines in the industry.
 
N1120A
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RE: What Makes LH Successful?

Tue May 25, 2010 7:38 pm

Quoting aznmadsci (Reply 1):

Quick question, what is PTW?

PTV. W = V in German. V = Fow. No W sound in the language.

Quoting wn700driver (Reply 2):
I would say diversification is a good bit of it.

Not to mention vertical integration.

Quoting L1011Lover (Reply 3):

very obvious...

To a German or German speaker who understands the whole W/V thing. A lot of Germans actually make that mistake, mistaking sound for form.
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peanuts
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RE: What Makes LH Successful?

Tue May 25, 2010 7:46 pm

LH=Germany

Germany=Daimler (Mercedes), Porsche, BMW, Volkswagen (+Audi), Siemens, Bosch, Adidas, Bayer, T-Mobile, Miele plus numerous beer brands  

Germany has a reputation the uphold. They work very very hard, these folks. Good for them.
 
XA744
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RE: What Makes LH Successful?

Tue May 25, 2010 8:28 pm

Quoting HAM1981 (Thread starter):
What makes LH success?



... Just reliability... dependability...

Have flown them extensively... never let down !!!

Best regards
No matter how you fly...just never get your wings clipped !
 
solarflyer22
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RE: What Makes LH Successful?

Tue May 25, 2010 8:38 pm

They're well run in general. I do think part of their success is that their hub airports have had significant investments made into them. Frankfurt and Munich airports are better airports to operate out of than say Heathrow or CDG. They operate a mixed Airbus/Boeing fleet which is interesting as well but despite the larger number of aircraft types they seem to do quite well. It is interesting in my mind that they are not based out of Berlin. I do think the German government does take a small piece of the credit for their success. They have't done anything to throw LH under the bus so to speak and they certainly take part in the airport planning. LH has also integrated acquired airlines fairly well. Swiss for example.
 
Rj111
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RE: What Makes LH Successful?

Tue May 25, 2010 8:58 pm

The same reason the Deutschlanders tonk ass at every World Cup despite having seemingly average players.

German efficiency of course.

[Edited 2010-05-25 14:00:31]
 
haddock0815
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RE: What Makes LH Successful?

Tue May 25, 2010 10:32 pm

Quoting RJ111 (Reply 15):
The same reason the Deutschlanders tonk ass at every World Cup despite having seemingly average players.

German efficiency of course.

So you better hope that BA will never ever have a penalty shoot- out!
  
 
macc
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RE: What Makes LH Successful?

Tue May 25, 2010 11:02 pm

not to forget a solid and sustained management which is grown inhouse. no ramazottis from outside who invent flying new each day.
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Rj111
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RE: What Makes LH Successful?

Tue May 25, 2010 11:27 pm

The funny thing is they have a staggering amount of quads both in service and on order. Which highlights, contrary to what many on here would have you believe, how much more to running a successful airline there is than the amount of fuel your aircraft burns.
 
macsog6
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RE: What Makes LH Successful?

Wed May 26, 2010 12:57 am

LH has long had a good solid business plan, a mangement team that understands that plan, employees that support that plan, and pax that love to fly them, including me. And they have been doing this for a number of years.

They have not jumped on the bandwagons that other carriers have and over-expanded in good times and then paid the price in slow times.

In short, good management for a very long time.
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UALWN
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RE: What Makes LH Successful?

Wed May 26, 2010 8:00 am

Quoting RJ111 (Reply 18):
The funny thing is they have a staggering amount of quads both in service and on order. Which highlights, contrary to what many on here would have you believe, how much more to running a successful airline there is than the amount of fuel your aircraft burns.

Indeed. I run a thread about this a while ago. Right now LH has 81 quads, more than anybody else: 26 343s, 24 346s, 30 744s, 1 388, plus 14 388s and 20 748s on order. The only wide-body twins they operate are 15 333s, with none on order.
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keesje
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RE: What Makes LH Successful?

Wed May 26, 2010 8:54 am

A captive large loyal home market. The rest is extra.
"Never mistake motion for action." Ernest Hemingway
 
rabenschlag
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RE: What Makes LH Successful?

Wed May 26, 2010 10:30 am

For quite a while, the company was/is run by engineers:

Mayrhuber (03-now): mechanical engineering
Weber (91-03): aerospace engineering
Ruhnau (83-91): electrical engineering

I don't know whether this was important for their alleged success, but I think it is an interesting fact.
 
Nicoeddf
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RE: What Makes LH Successful?

Wed May 26, 2010 10:44 am

Quoting keesje (Reply 21):
A captive large loyal home market. The rest is extra.

It certainly isn't as easy as that. But it contributes.
 
PanHAM
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RE: What Makes LH Successful?

Wed May 26, 2010 11:38 am

Quoting Rabenschlag (Reply 22):
Ruhnau (83-91): electrical engineering

Ruhnau should be re-named Ruinau, because he almost crashed LH. Weber turned the company around to where it is today, from a state owned enterprise to 100% market flotation.



Quoting keesje (Reply 21):
A captive large loyal home market. The rest is extra.

Not by far. The LH market share has been hovering around 30-35% in most years. KL AF SK BA have been pilfering most markets in Germany for decades. Sure, LH does the same in other European markets. LH has managed to become a European airline even before the single market was realised. OTH, a strong competeitor on the home market has emerged with AB, while the European competetors have rather lost market shares, may be not that mch to LH but to the Gulf carriers.
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keesje
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RE: What Makes LH Successful?

Wed May 26, 2010 12:00 pm

Quoting Nicoeddf (Reply 23):
It certainly isn't as easy as that.
Quoting PanHAM (Reply 24):
Not by far.

The majority of passengers are german, because of the dominant position in the big German market. They are the one they pay most because of the many direct connections from their origins and cultivated preference for the home carrier. A captive market. Passengers from the rest Europe don't care to much about the LH compared to BA and AF/KLM and have to be bought away at lower margins. It's not like KLM, SQ or EK that a small percentage locals on board (KLM 20%).

But maybe I'm all wrong and its because of excellent quality, leadership & vision.



 
"Never mistake motion for action." Ernest Hemingway
 
Hywel
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RE: What Makes LH Successful?

Wed May 26, 2010 12:04 pm

I once read that only 30% of the LH group's profit comes from passenger flights. The other 70% comes from LSG Skychefs, LH cargo, LH Technik (which services A320s for hundreds of airlines worldwide) etc. they have so many subsidiaries.
 
PanHAM
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RE: What Makes LH Successful?

Wed May 26, 2010 12:16 pm

@ keesje - LH has a strong domestic route network and you may be right when most passengers on those flights are German or people living in germany. That may however be different on the rozutes connecting to long haul destinations.

Besides that the number of German passengers on all LH flights is around 30%, pretty much the same the market share is they have out of Germany. I live near FRA and usually on flights to and from FRA one can experience the doibversoity of nationalities. Once I came home from TLV on a full 747 and there were 9 people - in words nine - standing at the baggage conveyor. The others connected all over the world and that was certanly not Germans flyng from Isreal to the USA. People fly from BHX via FRA to GOT and all possible connections.

FRA plus Star Alliance has a 70% market share at FRA, that's much, but nowhere near a captive market. I have an alternative to most of the destinations I am flying to. That is even more so at other markets in Germany. I have routed air cargo for many years at Hamburg. I could use KL, BE/BA, SK and SN who where strong there or truck to FRA to connect to anyone flying there from AC and AI to PA and TW.

Captive market? No such thing here.
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aerokiwi
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RE: What Makes LH Successful?

Wed May 26, 2010 12:54 pm

Quoting keesje (Reply 21):
A captive large loyal home market. The rest is extra.

I think this sums it up nicely. Germany's corporate accounts are a very rich vein for the airline to tap. Service-wise, they're extremely ordinary, though most European and North American legacy carriers are too.

Quoting keesje (Reply 25):
But maybe I'm all wrong and its because of excellent quality, leadership & vision.

No no, stick with your original inkling.

Quoting huaiwei (Reply 7):
And they take global alliances seriously. Very seriously, much more seriously than some of its competitors like BA who seems only interested in cornering the Anglo-sphere market. For this reason, therefore, you find LH working hard to build a presence in the growth markets of the world, flying to far more destinations in Asia than any other European carrier

If they took alliances that seriously, wouldn't they be flying their own metal to fewer destinations and instead let their alliance partners in those countries fly for them on a codeshare?

Quoting RJ111 (Reply 18):
Which highlights, contrary to what many on here would have you believe, how much more to running a successful airline there is than the amount of fuel your aircraft burns.

"Many on here"? Oh yip, interested in quantifying that claim? Actually don't bother - a veiled attempt at provoking an AvB dispute with a strawman argument. Nice try.
 
UALWN
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RE: What Makes LH Successful?

Wed May 26, 2010 1:10 pm

Quoting PanHAM (Reply 27):
Once I came home from TLV on a full 747 and there were 9 people - in words nine - standing at the baggage conveyor. The others connected all over the world

This has always been my experience too. A couple of years ago I flew JNB-MUC-BCN. At MUC I (stupid me) was forced to check in two bottles of wine I had bought at the duty-free shop in JNB. When my LH 319 arrived at BCN, only five bags came out of the conveyor: those originating in MUC, including my bottles of wine. Everybody else's bags were still in MUC, including the bag I had checked in at JNB. That included people coming from GRU, SIN, SFO, etc. etc. etc. The vast majority of the passengers did not originate from MUC.
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UALWN
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RE: What Makes LH Successful?

Wed May 26, 2010 1:21 pm

Quoting aerokiwi (Reply 28):
I think this sums it up nicely. Germany's corporate accounts are a very rich vein for the airline to tap. Service-wise, they're extremely ordinary, though most European and North American legacy carriers are too.

Presumably BA can tap on the massive London corporate account market, yet they're losing money left and right. LH must be doing something right that BA isn't. Maybe it's the quality, leadership and vision after all...
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Rj111
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RE: What Makes LH Successful?

Wed May 26, 2010 1:23 pm

Quoting aerokiwi (Reply 28):
"Many on here"? Oh yip, interested in quantifying that claim? Actually don't bother - a veiled attempt at provoking an AvB dispute with a strawman argument. Nice try.

Considering both A and B have planes that are more and less efficient, both A and B have quads in the past and in production, and LH have a lot of both A and B in their fleet, I'm not sure how you think i could be trying to stir and A vs B argument.
 
PanHAM
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RE: What Makes LH Successful?

Wed May 26, 2010 1:45 pm

Quoting aerokiwi (Reply 28):
think this sums it up nicely. Germany's corporate accounts are a very rich vein for the airline to tap.

LOL, regardless if person or company, one becomes rich from keeping it, never from spending it. I guess you never sold goods or services in Germany. It's one of the most difficult markets in the world. AB has signed a lot of corporate accounts, taken away from LH, because AB is cheaper. People fly Y instead of C now which does not always save money but they do it, if nothing else, just for the excercise. In large companies, controllers rule.

I am glad that I own my noodle shop since 20 years now and can spend my own money, not having to ask when flying C or staying in a better than average hotel.
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charliecossie
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RE: What Makes LH Successful?

Wed May 26, 2010 2:09 pm

Quoting UALWN (Reply 30):
Presumably BA can tap on the massive London corporate account market, yet they're losing money left and right. LH must be doing something right that BA isn't. Maybe it's the quality, leadership and vision after all...

LH lost 300 million Euros in the first quarter of this year!
BA lost just over half that amount.

So, just what are LH doing better than BA?
 
Shany
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RE: What Makes LH Successful?

Wed May 26, 2010 2:20 pm

In my opinion:

They offer a good product for business travellers and they have quite a lot of them. The main advantage is not so much the cabin interieur (however their product is really ok) but more the flexibility and the thousands of possible routes worldwide due to a strong (*) alliance.

They were going ahead in many respects, for example Cargo, Maintainance, Regional, alliances, etc. LH Cargo was strong long before others stepped into this field. Keep in mind AeroLogic for this reason as well. Same is true for LH Technik. For example they ordered their A321s with V2500 engines only that they can offer this engine as well for maintainance IIRC. CLH serves as a good feeder for the mainline and gives flexibility to thinner routes. Also keep in mind that they always invested wisely: LH Technik Malta, Lufthansa Italy, Swiss, AUA,... *Alliance was the first big alliance at all, IIRC and it is still growing with strong partners.

One additional thing that I noticed is, that LH is really a strong team - this means all belong to a kind of "family". I think this contributes to a whole lot of minor advantages that keep them "on top". They also invest a lot of money into their staff for example by additional training, etc.

Shany
ETOPS - Engines Turn Or People Swim
 
UALWN
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RE: What Makes LH Successful?

Wed May 26, 2010 2:38 pm

Quoting charliecossie (Reply 33):
LH lost 300 million Euros in the first quarter of this year!
BA lost just over half that amount.

The latest full-year results are as follows: the LH group had a EUR 130 million profit, while BA lost GBP 531 million. In the previous year the difference was even larger. You can draw your own conclusions.
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PanHAM
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RE: What Makes LH Successful?

Wed May 26, 2010 3:56 pm

Quoting charliecossie (Reply 33):
LH lost 300 million Euros in the first quarter of this year!
BA lost just over half that amount.

You are comparing apples with peaches. Even if you pro-rate this to the turn-over in the same period (LH's is more than BAs) this would say nothing about the performance.

LH had a pilot strike in that quarter, even though it ended rather quickly, it cost LH far more than 100 million Euros. There was extremely bad weather with a lot of snow in January and February which resulted in a lot of flight cancellations. The UK had snow as well, hoiwever BA is a one airport airline, Air London, with little traffic at other UK airports.

LH has two major and a smaller hub in Germany plus another 8 airports in Germany with reasonable traffic. They are much more exposed.
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skyliner747
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RE: What Makes LH Successful?

Sat May 29, 2010 1:26 pm

Quoting L1011Lover (Reply 3):

PTW could have meant anything. May have been a financial term, etc.

there are far more important factors in running a successful corporation than television sets, and the poster could have been referring to anything,


The comment "very obvious" is necessary and arrogant.


I never understood the "know it all" attitude we often take with each other on these forums. It is very tiresome.
 
antonovman
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RE: What Makes LH Successful?

Sun May 30, 2010 8:32 am

Quoting skyliner747 (Reply 37):
The comment "very obvious" is necessary and arrogant.

Don't you mean unnecessary ?
 
LHPII
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RE: What Makes LH Successful?

Sun May 30, 2010 8:55 am

Some things have already been said but I would like to summarize it:

1. large captive market
2. based in one of the largest export economies
3. ideal geographical position in the center of Europe, making most of the Europe in one way or another a huge catchment
area
4. diversification, LH is an aviation group, whereas most of other airlines are concentrated on pax services only.
That means when airline industry reaches its cyclical low, different segments of the group will be affected at different
times, for example Cargo business feels the crises first, whereas MRO segment the last.
In all of its group activities LH is a market leader, or at the top: LH Passage or passenger services are at the top in pax
segment, LH Technik is a market leader in MRO, LSG/SkyChefs is world's largest airline caterer, LH Cargo one of the
largest Cargo companies, LH Systems on of the leaders in aviation IT solutions.....
5. huge investments in growth markets
6. in-house grown management that is loyal to the company
7. very loyal workforce that is extremely proud of working for LH, and an excellent employer-labour relationship in spite of
recent pilot strike.
8. german mentality and work codex
9. recognition of market opportunities. LH invented practicly Alliances, or better say, LH CEO at the time, in 1997, Juergen
Weber came up with the idea and Star alliance has been set up in which LH holds a dominant position and has a say.
Star gives LH opportunity to have a global position, while it consolidates in Europe by taking over european Star
members.
10. Economies of scale play another huge factor in its success. Getting bigger, gets cheaper to operate.....LH now buys
services, aircraft, fuel and other thing for the whole group, and that gives them huge advantage over much smaller
counterparts.

There are ceretainly other factors involved that I can not think of right now, but you are very welcome to add.........

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