Lufthansa’s Successful Growth Strategy

1. Introduction

In the past two decades, Lufthansa has undergone a major transformation. What started as a small German flag carrier has grown into one of the world’s largest airlines. Lufthansa is now a global player with a strong presence in all major continents.

This growth has not been without challenges. Lufthansa has had to adapt its management style to cope with the complexities of running a large and geographically diverse operation. In some cases, this has meant adopting a divisional structure. In other cases, Lufthansa has had to focus on process orientation to optimize its operations.

In this essay, we will take a closer look at how Lufthansa has managed its growth over the years. We will start by looking at the airline’s growth strategy in the 1990s. We will then look at how Lufthansa has structured itself to cope with its expanded operations. Finally, we will look at how Lufthansa has gone global by forming partnerships with other airlines and joining the Star Alliance.

2. Lufthansa’s growth strategy in the 1990s

– Lufthansa in 1994: a group of changes

In 1994, Lufthansa was facing a number of challenges. The German economy was in recession and air travel was stagnating. In response, Lufthansa undertook a group of changes designed to improve its competitiveness.

First, Lufthansa embarked on a series of cost-cutting measures. The company reduced its workforce by 10% and restructured its fleet. Second, Lufthansa realigned its routes to focus on more profitable routes. Third, Lufthansa formed partnerships with other airlines to share costs and expand its global reach.

These changes improved Lufthansa’s bottom line and positioned the airline for growth in the coming years.

– The three-phase procedure

In the late 1990s, Lufthansa embarked on an expansionary growth strategy. The airline first set out to grow its market share in Europe. To do this, Lufthansa acquired smaller airlines and formed partnerships with larger airlines. This allowed Lufthansa to expand its route network and offer more flights to more destinations.

The second phase of Lufthansa’s growth strategy was to expand beyond Europe. The airline started flying to new continents such as Africa and Asia. To support this expansion, Lufthansa established new hubs in Frankfurt and Munich. This allowed the airline to offer more connecting flights and reach more markets.

The third and final phase of Lufthansa’s growth strategy was to focus on quality rather than quantity. The airline started offering new services such as business class and first class travel. It also invested in new aircraft such as the A380 superjumbo jet. This helpedLufthansacontinueto growitsmarketingshareandpositionitselfasa premiumairlinebrand.

3. Structure and optimization

– The new structure of Lufthansa

To cope with its expanded operations, Lufthansa adopted a new organizational structure in the early 2000s. The company divided its operations into three main business units: passenger airlines, cargo airlines, and aviation services.

Each business unit was responsible for its own profit and loss. This division of responsibility helped Lufthansa to better focus on its core businesses and to improve its overall profitability.

– A focus on process orientation

In the early 2000s, Lufthansa also started to focus on process orientation. The company implemented a new management system called Total Quality Management (TQM). This system helped Lufthansa to improve its operations by standardizing processes and procedures.

TQM was initially implemented in Lufthansa’s passenger airline business. The success of TQM in this area led to its roll-out in other areas of the company, such as cargo and aviation services.

4. Lufthansa goes global

– international partnerships

To support its growth beyond Europe, Lufthansa has formed a number of international partnerships. These partnerships allow Lufthansa to expand its route network and offer more connecting flights.

Some of Lufthansa’s most important partners include United Airlines, Air Canada, and Singapore Airlines. These partnerships have helped Lufthansa to become a leading global airline.

– The Star Alliance

In 1997, Lufthansa joined the Star Alliance, a global alliance of airlines. The alliance currently has 27 member airlines, which together serve more than 1,300 destinations in 190 countries.

Being a member of the Star Alliance has helped Lufthansa to expand its global reach and offer more flights to more destinations. It has also helped Lufthansa to improve its customer service by sharing best practices with other member airlines.

5. Conclusion

In conclusion, Lufthansa has managed its growth successfully by adopting a number of different strategies. The airline has expanded its operations by acquiring smaller airlines, forming partnerships, and expanding its route network. It has also optimized its operations by focusing on process orientation and quality management. Finally, Lufthansa has gone global by joining the Star Alliance and forming international partnerships.


Lufthansa was inspired to pursue a global expansion strategy in order to tap into new markets and passenger segments. The company saw that there was potential for growth in emerging markets, and wanted to capitalize on this opportunity.

Lufthansa went about expanding into new markets by first establishing a presence in key cities through its subsidiary airlines. It then built up its network of routes and destinations from these hubs.

Lufthansa faced challenges and complexities during its expansion process due to the need to adapt its business model to different market conditions, obtain the necessary regulatory approvals, and manage cross-border operations effectively.

Lufthansa overcame these challenges by taking a phased approach to expansion, carefully planning each step of the process, and building up a strong team of local managers who understood the nuances of the various markets.

Other companies can learn from Lufthansa’s experience by taking a similar phased approach to expansion, doing their homework in terms of market research and feasibility studies, and putting together a solid management team with local expertise.

The next big challenge for Lufthansa as it continues to expand globally will be managing its operations in an increasingly complex world environment characterized by geopolitical uncertainty, economic volatility, and environmental sustainability concerns.