Aviation

Strengthening of competitive capability at a leading airline through restructuring

Company B, a leading airline, had continued to make profits throughout the 1980s owing to market expansion. However, in the 1990s the company found itself in the red owing to the impact of the Gulf War and the increasingly stiff competition following the liberalization of the airline industry in the EU. With the all-out assistance of Roland Berger, the company was able to get back onto a growth track in three stages.

1. Implementation of a drastic cost-cutting program to reduce the deficit: The company was able to return to profitability in one year owing to rationalization that began with a reduction in personnel costs through the slimming down of what had become a bloated organization to an appropriate level and the reduction of operational costs through such measures as the reform of the operating process.

2. Restructuring of businesses and the organization itself in order to respond quickly to both environmental and customer changes and to realize a higher level of service: We converted the company from its original large company model to a new group management model, created small business units through specialization and spin-offs, accelerating the speed of management decisions, clarifying accountability, strengthening customer response capability and increasing the transparency of costs.

3. Establishment of sustainable competitive advantage through further strengthening of competitive capability and ongoing cost reduction at the operational level: We realized the strengthening and establishment of a customer orientation and cost awareness at the front line by thoroughly incorporating the business and organizational reforms described above (2.) at the operational level.

Roland Berger played a big role in the entire process, going beyond cost-cutting measures to lead the implementation of business and organizational restructuring aimed at future growth, establishing a clear structural reform concept, drastically restructuring the business model, and communicating the growth scenario to people at the operational level and overseeing its implementation there.

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- Development of a multi-hub strategy and the examination of its feasibility based on quantitative assessment and an operational perspective
- Development of a network optimization strategy for a post-management integration European airline
- Creation of a shared operation strategy for affiliated airline companies

Takashi Hirai
Partner
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Keisuke Yamabe
Partner
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