Lufthansa: Going Global, but Hot to Manage Complexity

Lufthansa: Going Global, but Hot to Manage Complexity

Describe the type of international strategy the company has chosen.

The type of international strategy that Lufthansa has chosen is to join three different airline alliances. The biggest airline alliance that the company is with is Star Alliance. It was founded in 1997 by five different airlines and Lufthansa was one of the five who founded this alliance. Since the beginning of the Star Alliance, it has grown from the five airlines who started the alliance to twenty seven members. (Star Alliance, 2010) This was the main international strategy for the airline because "mergers are still legally prevented across many country borders" (Tywuschik & Steger, 2009). Another strategy that Lufthansa choose was to fully privatize the company in 1997. The company even gained a partnership with a United States airline, which has helped the airline grow more internationally and other partnerships or purchases.

Explain what means the company has used to expand internationally.

The main means that Lufthansa used to expand internationally was helping to form the Star Alliance, which allowed the company to travel internationally. By doing so has allowed the company to become the fifth largest airline in the world with having 18 domestic destinations and 183 international destinations in over 78 countries. With its partners in the Star Alliance, the company now has around 410 destinations worldwide. (Lufthansa, 2010) In 1997 the company became privatized and "is owned by private investors (88.52%), MGL Gesellschaft für Luftverkehrkehrswerte (10.5%), Deutsche Postbank (1.03%) and Deutsche Bank (0.4%)" (Lufthansa, 2010). Another means that Lufthansa has used to expand the company internationally is when Lufthansa and Jet Blue, an American airline, became partners. "This is the first major ownership investment by a European carrier in an American carrier since the EU-U.S. Open Skies Agreement became effective in 2008"...