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Lufthansa: The SCORE program - change for success?

  • ID: 2334501
  • October 2012
  • 22 pages
  • MarketLine


Lufthansa’s premium position in the European aviation industry is under threat. As well as fuel prices, environmental regulation threaten to disadvantage European carriers compared to international rivals. A surge in popularity for budget airlines and Gulf carriers has prompted Lufthansa to begin the SCORE program, aimed at saving €1.5bn in costs by 2014 via rationalization and efficiency.

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Lufthansa is the largest aviation company in terms of revenue. Other proxies, such as passenger numbers, also suggest Lufthansa enjoys a leading position, if not outright first place.
The company’s revenues grew 8.6% in 2011 to reach €28.7bn ($39.9bn).
Staff costs are a significant problem for Lufthansa, accounting for 22% of their expenditure in 2011. In comparison, Ryanair staff costs were 11% and Emirates’ costs were 13.2% of their total costs.

Your key questions answered

- Why has Lufthansa embarked on this program?
- How successful will the program be?

Note: Product cover images may vary from those shown

Lufthansa operates in an increasingly difficult market

Lufthansa is Europe’s largest airliner

The airline faces mounting difficulties
The SCORE program

2011 showed some promise despite worsening conditions

Brands were restructured

Synergies are crucial for the SCORE program

Costs are to be driven down

Revenue generation is also being targeted
Change for success?

Union hostility

SCORE estimates do not account for restructuring costs

Interim results presented challenges

The aviation industry is not immune from the global slowdown
A sensible strategy in a harsh environment
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