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A restructuring project managed by Lufthansa Consulting is typically divided into three main phases:
Phase 1 - Operational Turnaround
The operational turnaround has its focus on stopping the (financial) bleeding. In accordance with the experience from various successful projects, five objectives will be tackled:
At the beginning of the project a quick analysis of existing “red tape” through interviews with top management will be conducted. “Red tape” includes all kinds of restrictions (e.g. due to local law). It is important to mutually define an approach to deal with the “red tape” during the turnaround project.
The second objective is the assurance of the airlines financial liquidity. Thus, Lufthansa Consulting experts will familiarize themsleves with the current budget and controlling processes (what is measured when and where) and analyse the cash flow (monthly, quarterly) with a focus on:
It is also important to immediately reduce the financial losses. Thus, a route cause analysis on all important revenue and loss drivers must be conducted. Lufthansa Consulting will use a best-practice check list based on the experience gained in the last 20 years. As time is a crucial factor in the first phase, the key is not to look at all processes and areas but to select the right ones.
The stabilization and increase of operational and services performance has to be achieved in order to have a solid operation for the turnaround process. According to Lufthansa Consulting's experience a critical financial situation arises with performance irregularities. Thus, the performance data will be analyzed with a focus on operational and service indicators (e.g. punctuality, reliability, customer satisfaction, etc.) and short term improvement actions will be defined.
The fifth objective is to provide extensive communication to all stakeholders. Therefore, all stakeholders will be identified and a communication strategy developed. Furthermore, actions will be defined to involve all stakeholders pro-actively in the turnaround process.