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Abstract
The theory of life cycle of airline is a theory-based on staging of various concepts and categories, combining economic theory, strategic and crisis management. Typically, using fragments of the theory of cycles applied, depending on one or another developer’s perspective of the overall picture of management policy airline. Naturally, in this case is not about the principle of synergy, because there is just a coincidence sets of cycles of resources at the disposal of organizations, including: natural, material, labor, financial and technological.
In the context of the changing external situation the airline should not only focus on internal problems, but also to develop a management strategy that would allow to keep pace with changes in their environment. Establishing links between external and internal environment the organization provides a mechanism of governance.
When analyzing the airline company it is necessary to point out the main peculiarities of the industry. Let’s highlight the main features of the market development of air transport business, which at the present stage of development include:
– the cyclical nature of the industry;
– low level of profitability of airlines;
– high dynamics of technological change and a significant degree of influence of new – technologies on cost airline;
– high rates of growth of production and financial performance of airlines from developing countries;
– the emergence of the international airline alliance;
– distribution of business-model of “low-budget” airline.

The company’s analysis due to the Porter’s Model
Analysis of the competitive environment and position of organization Lufthansa involve the definition of complexity and dynamism of the competitive environment –. Universal method for this analysis are the five forces model Porter. Five Forces Model assumes a structural analysis based on determining the intensity of competition and study the threat to entry of potential competitors, government buyers, power suppliers, the threat posed by substitute services.
Let’s analyze the Lufthansa airline company. First of all, Lufthansa is one of the largest airlines in the world, established on Jan. 6, 1926 by the merger of German airline Deutsche Aero Lloyd and Junkers Luftverkehr. The airline Lufthansa is a company of Lufthansa Group, numbering about 350 units and subsidiaries around the world.Today, Lufthansa Group flies to 411 cities in 96 countries worldwide. (Deutsche Lufthansa AG: Company Profile)
Let’s gives a general description and the main trends in global air services market, defines the features of the industry, identifying the most important factors of competitiveness of airlines, examines the influence of the microenvironment in the functioning of the airlines, including crisis management, liberalizing air travel market and trends in the ownership structure of the airline, the possibility of mergers and acquisitions in the market that lead to a change in performance of companies in the world market air services, create an opportunity to improve their competitiveness.

Challenges in this industry, economic barriers. Competitive advantages of the company’s can be defined by performance management, profitability, liquidity, market stability, service quality, efficiency (low cost), image (the company’s brand) and several other parameters. The competitiveness of air transportation company reflects its ability to more fully meet the requirements of consumer demand in comparison with similar services from other companies and airlines providing passenger air transportation services is determined, first of all: price, range and quality of services, sales of seats on its flights, ticket distribution system, the effectiveness of advertising, the airline’s image.
All of the factors affecting the competitiveness of the Lufthansa airline, can be divided into:
1. External (macro factors), which include market conditions, crises, both in the whole world economy, and directly to the air services market, mergers and acquisitions, entry into the alliance, the possibility of obtaining state aid, including benefits and subsidies, as well as access to investment attraction which often depends on the ownership carrier;
2. Internal (microfactors) – activities on the basis of modern management methods, including the introduction of effective management programs cost airlines, revenue, personnel, motivation, and consequently improve the quality of airline services, the expansion of routes, development of new geographic markets, the active implementation new information technologies.
The most significant impact on the development of competition in the industry for Lufthansa – is a presence in the industry a limited amount about equal in their capabilities and size of competitors, as well as the use of these companies of different business strategies, are fundamentally different in structure formation of costs, marketing strategy and target groups of consumers. Many competitors and
competitive rivalry – high Competition in the air service has become tough as ever. Some 200 airlines are entitled to exercise traffic in Germany and out and fight for passengers. To stay in business, airlines must address when planning flights to the demands of its customers. Simultaneously, the impact the crisis, and the use of available resources should be efficiently and effectively.
Lets see the industry development analysis

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Fierce competition in the industry reduces the operating profits of airlines to maintain it at that level, they have to increase turnover, which confirms the statistics: the volume of air traffic in 1993 was 1,580 billion pass.-km. in 2001 reached 2,600 billion in pass .- km., and in 2006 – 3940 billion passenger-km. (ICAO Environmental Report 2009)
In 2007, total scheduled traffic of approximately 2,260 million passengers. The growth in passenger traffic as a whole outpaced the proposed freight containers in their seats. As a result, the average passenger load factor on all scheduled services (domestic and international) increased to 77% compared with 76% in 2006. With regard to traffic by region, then 31% of the total traffic (passenger / freight / mail) was carried out by airlines in North America, 30% – airlines in Asia / Pacific, 27% – European airlines, 6% – the airlines of the Middle East, 4 % – airlines in Latin America and the Caribbean and 2% – African airlines. (ICAO Environmental Report 2007)
Sales performance 2009
in % compared with previous year Revenue passenger-kilometres
Cargo tonne-kilometres
Source: IATA Carrier Tracker 12/09.

Europe –5.0 –16.1
North America –5.6 –10.6
Central and South America 0.3 –4.0
Asia/Pacific –5.6 –9.2
Middle East 11.2 3.9
Africa –6.8 –11.2

The crisis intensified the competitive processes that caused the ruin of a number of airlines. In particular, the bankrupt carriers such as Swissair and Belgium’s Sabena, under the protection of Article 11 of the Law on Bankruptcy “U.S. hit US Airways, in this position and the airline was United Airlines. As traditional carriers have not been able to quickly shift into new markets and lost some customers, the market has intensified airline discounters who provide services at reduced prices, because of what started the redistribution of European air transportation market, as well as the U.S. domestic market. Since one of the competitive advantages of low cost airlines is the mobility, in times of crisis, they were more competitive.
The plight of the industry led to the consolidation of the market. Competition in the aviation industry is currently focused mainly between groups, rather than among individual airlines. The possibility of cost sharing through marketing and increase revenue through the carriage of more passengers make alliances more attractive business model. In addition, only airlines that are members of the alliance, able to create a worldwide network of routes without significant capital investment. Building alliances allow largest airlines of the world to take a greater market share. (ICAO Environmental Report 2007) Brand recognition of existing companies

Lufthansa International Strategies:
o Industry changes, deregulation and the economic pressures of sustaining a profitable business, Lufthansa formed The Star Alliance with other airlines to provide a seamless network of intercontinental connections.
o Mergers and acquisitions were costly and ran into governmental regulations and limitations. The alliance would provide the needed “expansion” sought by Lufthansa with limited regulatory hurdles and reduced investments.
o Emphasis is on maintaining a Global strategy that offers the customers a similar level of service throughout the network. (Deutsche Lufthansa AG: Company Profile)
You may find a significant trend of increasing the efficiency of air transport and competitiveness of market participants on the basis of the formation and development of global airline alliances. In order to be competitive global alliance for the benefit of the companies-participants of the alliance, its members must consist of several European airlines and a major American airline. In addition to such factors as indicators of the distribution of passenger traffic in the world, it is connected with the peculiarities of the airline industry U.S. and Europe. Currently, the most famous is the Global Alliance Star Alliance, oneworld, SkyTeam. Barriers to уntry