Economic processes are versatile and provide many services in the corporate world. The main approaches promote several factors to be determined, namely: agreements concerning details of the affair including time, place, quality, and quantity of products or services. The synthesis of economic development with its standpoints and business involvement tends to form a unity of this complicated interrelation called transport industry.
In the twenty-first century, there is no surprise that transport systems underwent and perpetually undergo some improvements in the aspects of the logistic approach. Systematized and vital for this branch of interests principles touch upon the following points: nomenclature of what should be delivered passengers or freight, final destination, consideration of time limits, and quantity factor. The varieties of types of transport presuppose the difference in prices, assets, and customer supply on the whole. (Boyer 45) This feature of transport systems props up against evaluation of supply and demands peculiarities in this sphere of economic science.
There are many types of transportation used worldwide such as: by car, by rail, by air, by ship, by pipe, etc. This variety of transport ways assumes the fact of the complicated structure and facilities which are to be born in mind. That is why regulations of transport aspects in relationships between companies and customers are of great importance. Undoubtedly in this approach, one should presume regulations of both safety and economic factors.
By the statistics of the United States, the general circulation of traffic is concentrated in different proportions as of the regions and transport supply. The fact that the epoch of fastened transportation development reached its apogee is a universal truth, especially in America. Facts are a stubborn thing. With regards to the credibility and reliability of transport systems in this country it is important to admit the following piece of information:
A 2005 American study stated that there are seven root causes of congestion, and gives the following summary of their contributions: bottlenecks 40%, traffic incidents 25%, bad weather 15%, work zones 10%, poor signal timing 5%, and special events/other 5%. ( “Traffic Congestion and Reliability: Trends and Advanced Strategies for Congestion Mitigation”)
Transport systems hugely contribute to the global economy and prevent slowdown of companies as well as countries elaboration in terms of great local and world competition. There are many examples of credibility and the ability to compete with companies in various industries. This paper is dedicated to working out transport economics principles in the air industry with many points as for supply and demand features, main goals, and statistics.
Air company Lufthansa AG is one of the most famous and popular carriers in the world with headquarters in Germany. The interests of the company consider “five main areas: Passenger Transportation, Logistics, MRO, Catering and IT Services.” (Transport for a Global Economy 2) The impact of this Aviation Group falls into the trust of the passengers, current and potential, because of constant innovations and safety programs provided.
It is known that the overall client base of the company counts 70 million people. Challenges of previous times implemented in a gradual growth of passengers flow in Europe and other countries made the board of directors concentrate the vast majority of efforts and financial investments in the Passenger Transportation. “Lufthansa Passenger Airlines, SWISS and Germanwings, as well as the equity investments in British Midland (bmi), JetBlue and SunExpress are the main subsidiaries of the Group.” (Transport for a Global Economy 2) Evaluating the spread of Company’s influence on such continents as Eurasia and Americas was enlarged with the opening of new frontiers in Africa gathering all the key regions and cities to provide fast and comfortable flights around the world.
Fast growth and a spontaneous decline in takeoff and landing flights are observed by many economists as a stimulus for working out the strategy programs to maintain the present stability of the Group’s work as well as to develop further perspectives of the Company. One of the reasons to reduce some programs of the company designed earlier is the economic crisis. Another reason to increase the capabilities of Lufthansa is the relatively low price for oil which appeared in the previous few months.
The decrease of valuable standpoints of the company is intended to be without fear of stable work and conveniences loss. This assumes takeoff and landing peculiarities of regulations developed in the Group. The point is that under conditions of crisis the Company should either provide planned takeoff and landing flights with a reduction of defined profits or shorten the common amount of flights with a tendency to become less competitive.
Logistics systems under present crisis conditions cannot go without the support of the government for this Aviation Group. Constantly appearing and competitive low-cost companies began in the last few years sharing the market of flight services. This presupposes that the middle layer of the population in different European countries and abroad will surely pay attention to this fact. The airports, on the other hand, should build additional terminals for this type of flight.
This fact comprises additional financing, of course. Lufthansa has at its own 534 aircraft with connections in more than 164 countries and many international hubs the biggest of which is that of Frankfurter. The Group applies to the European Union and German government in terms of the grave and striking arguments. One of them touches on the staff diversity and its number of 37,000 people. (Policy Brief 4)
Notwithstanding the current problems of transportation caused by the economic crisis, Lufthansa gives all hopes for the reclaiming of the African continent even taking into account the changeability, unless saying decay, of its economic and political climate in different countries, especially those situated in the central part of it. IT is a question of great expectancies from the side of many international and predominant carriers in the world area. “The prospects are very promising: Passenger volume will grow close to 6 percent annually by 2025 in Africa.” (Policy Brief 5)
These forecasts also take into account the mutual interest of both the United States and Europe in terms of further supposed increase of profits. The experts determine the exceeding positive shifts in the economic stability of airlines in European countries up to 3.6%; in the US this indicator offers prospects of 2.7%. (Policy Brief 5) Present agreements of the EU and African Union are close to the realization of promising transaction of enlarging the presence of Lufthansa in the future between European and African passengers.
Several programs are implemented for better cooperation of German Lufthansa and African able-to-confront-various-challenges leaders. One of the best known is “AFRICA IS COMING!” It is a program of young leaders from different regions of Sahara integration into the working schedules of the Group so that to evaluate and train new potential providers of the Company policy in the African continent.
The previous year was one of the best and more efficient for the Aviation Group. Policy Brief Report of Lufthansa displays the huge data with a strong emphasis on the service provision and costs correspondence striving at the achievement of the most striking goals of the Company. “Total revenues came to c 24.9 billion, the operating result totalled c 1.35 billion, and the group result was c 599 million.” Rather high and optimistic forecasts of the present CEO Wolfgang Mayrhuber for the year 2009 as an important period for Lufthansa to improve its credibility, competence, and general evaluation within other huge carriers.
Transportation economics is a key objective for Lufthansa AG as a major carrier in Europe and the US. All the logistic processes are counted here so that to support Group’s current policy as an integral constituent of further perspectives with multiple innovations and technologies of attending to customers helps it not to lag in the era of quick and perpetual refashions. Lufthansa Aviation Group’s main motto hangs upon the statement of the Company’s CEO: “Swift and uncomplicated implementation remains the most essential requirement to ensure the future survival of Europe as a successful centre of aviation in the face of global competition.” (Policy Brief 6).
Works cited
Kenneth D. Boyer. Principles of transportation economics; Addison-Wesley, 2004.
Office of Operations, Cambridge Systematics, Federal Highway Administration, United States, Texas Transportation Institute. Traffic Congestion and Reliability: Trends and Advanced Strategies for Congestion Mitigation; Cambridge Systematics, 2005.
Transport for a Global Economy: Challenges and Opportunities in the Downturn. International Transport Forum, Leipzig, 2009. Web.
Lufthansa Aviation Group. Web.