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26 Jun 2014

Aviado Partners contributes to analysis by Flight Global on Lufthansa's current challenges

Aviado-Partners Consulting GmbH, a leading international transport-sector consulting firm and a regular contributor to Airline Business magazine and Flight Global, provides industry insight to this analysis.

The article featured on Flight Global's pro website is titled "ANALYSIS: Sizing up Lufthansa's challenges" and provides excellent analysis and insights by author Graham Dunn on the issues facing Lufthansa.

Aviado Partners' Managing Partner Shakeel Adam is quoted in this article discussing some of the challenges facing Lufthansa in its restructuring. Shakeel highlights that “One of the fundamental problems facing Lufthansa is they have been increasing the size of their aircraft,”...“In theory, that means they have a lower unit cost. But that only works if you can fill a bigger aircraft without diluting yields.

Shakeel also comments on Lufthansa's exposure as a connecting carrier to increasing competition from other, fast-growing connecting carriers which have lower costs, as well as competition from other European carriers which also serve large home markets such as London and Paris, unlike Frankfurt and Munich.

Lastly, Shakeel comments on the struggle to reduce costs through shifting production from mainline Lufthansa to low cost subsidiary germanwings. The shift has not been smooth while costs and complexity have crept back in. germanwings looks like a rebranded Lufthansa, an LCC built by full service people, not low cost airline experts.

Lufthansa remains one of the most dependable and reliable airlines in Europe and the world. The restructuring of Lufthansa is absolutely necessary, but will need a real restructuring mindset to tackle productivity and costs. So far, most of the actions have been new strategies rather than tackling old challenges.

About Aviado-Partners Consulting GmbH

Aviado-Partners Consulting GmbH is a specialist management consulting firm providing objective, independent and evidence-based analysis, advice and implementation support to airlines, airports, rail operators, hotels and other transportation related companies around the world. The firm advises management, boards, investors, governments, leasing companies and other stakeholders across all the key commercial and strategy issues. Aviado Partners' team members and associates have worked with leading international full service and low cost airlines, global consulting firms, financial institutions and manufacturers both as members of senior management as well as an airline consultant. The Partners and Associates have led or had significant involvement in numerous merger, acquisition, restructuring, start-up, aircraft selection and performance improvement assignments in Asia, the United States, Canada, South America, Russia & the CIS, Africa and the Middle East.

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