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Technische Universität Berlin – WiSe 19/20

Fundamentals of project management

„Fly greener“ Lufthansa Group environmental strategy

By xxx

1. Project Definiton In 2008, the Lufthansa Group set up a strategic environmental program, aimed at achieving further progress in climate and environmental responsibility until 2020. The main goals include a reduction of carbon and nitrogen oxide emissions, increased operational efficiency and fleet modernisation as well as the promotion of alternative fuels and new recycling methods.

1.1 Project criteria (Task 1a) 2. Time limit In 2008, the Company set up a strategic environmental program. The project consists of several tasks, each having its own requirements that need to be met until a certain deadline. Most goals are set for 2020 with prospectives for 2050. 3. Novelty As the pressure on aircraft travel concerning environmental topics increases due to its relevance to the growing topic of sustainability, the Lufthansa Group among other airlines had to find ways to reduce their impact on global Co2 emissions and plastic waste. Most of the measures had to be created from scratch by technical development and creative recycling approaches. 4. Uniqueness To reach the goals, especially concerning fuel efficiency, a cooperation with different companies and suppliers is required. From AIRBUS and Boeing as aircraft suppliers to the different catering and recycling partners in 288 destinations all over the world. 5. Size Aside from the main actors and coordinators of the program responsible for development, implementation and research, it involves every employee of the Lufthansa group in their daily operations (for example cockpit, cabin crew, technicians, catering and pessengers), which makes the project size hard to measure but all in all very large. 6. Complexity Due to the great size of the company itself (135.000 employees) and the large amount of suppliers and contractors involved, we consider the complexity of the project to be rather high. The benefit lies in the possibility of multiple implementation. One and the same theoretical solution can be introduced in the routines of many operational units.

1.2 Project classification (Task 1b) CRITERIA

DESCRIPTION

Project content

Change in organization/ processes

Interval and time pressure

Infrastructure Industrial improvement construction

R&D of Products or Services

Fix date (no buffer

Fix date (including buffer)

Including external partner (vert.)

Including external partner (hor.)

Unique

Circular

National Private

International Public

Internal Project

External Project

Tasks of a project

Strategic

Operative

Need of third party integration

Business intern

Corporate intern

Contractor client relationship

Variable date

Project content The sustainability project aims at different fields and possibilities to make the company more eco-friendly. One part ist the reduction of carbon and nitrogen oxide emissions which is mostly fulfilled by developing more fuel efficient turbines, modernising the fleet and opimizing flight procedures as well as promoting alternative fuels and introducing new recyling methods, especially to the onboard cabin service and catering supply.

Interval and time pressure The project mostly aims to achieve their goals by 2020, for example the increase of 1.5% per year in energy efficiency. Some goals, like the 50% reduction in net CO2 emissions, are set for 2050. Due to the fact that the project was initiated by the company itself on a „voluntary“ level with the aim to make their flight operations more fuel efficient and avoid airline shaming by marketing themselves as a sustainable company, there is little to no external pressure to fulfill the project goals on time, though.

Contractor client relationship As the project is initiated and financed by the company itself, it’s a private project, even though it serves many external stakeholders. As the Lufthansa group is an international company itself and collaborates with a large amount of international partners and suppliers who need to be included in the project, the project is international. The nature of the project is external, because many companies in different fields are working together to reach the goals set by the Lufthansa group, who is contractor and client at once.

Tasks (Characteristics) of the project After classifying the different criteria, we came to the conclusion that the project is mainly of an strategic nature. Even though the problem is quantitatively measurable and well defined with a high level of details and tasks that can be operationalized, it contains predominantly higher-level goals designed to last several decades, so the targeting and reference period is predominantly strategic. The companies involved are dependent on each other as the topic of sustainability is one that concerns the overall development of airline travel, thus the Lufthansa group. Which is why we do argue that the level of the problem scope is strategic, too. Last but not least, due to the sheer amount of companies coming from different disciplines associated with this project, an external orientation is required.

Criteria Targeting Degree of detail Reference period Structural quality of the problems Degress of information precision Level of problem scope Environment

Strategic

Operative

X X X X

X X X

Need of third party integration The inclusion of vertical partners like aircraft manufacturers, airport bases and catering suppliers is essential to reach the goals. The companies are working together in a steep hierarchy, as the Lufthansa group is rather customer than partner in most cases.

2. Project Organization 2.1 Organizational Structure oft the case project (Task 1c) We would argue that our chosen project is fitted for a staff organization model, as the project requires a high number of interdisciplinarity between the partners working together, but the tasks and measures proposed by the project manager have to be implemented by line leaders withing the various companies. Also, the Lufthansa group as a rather conservative corporation, has a very strict hierarchy that should remain untouched in their daily business operations. Criteria

Staff/Line Organization

Project leaders authority to issue directives

X

Competence demarcation

X

The Responsibility

X

Support from the initiator

X

Non-permanent project employees

Independant/pure Project Organization

Matrix Organization

X

Criteria Authority to issue directives The project leader in this project has a limited authority to issue directives to other departments. He operates rather as a consulting expert to the heads of the staff units, providing information and quality proposals. The outsourced tasks – which are many - are maintained by other people in line, which would make this criteria a line organization. Competence demarcation The demarcation is determined by the organizational structure, and since the employees come from different departments it is a line organization. Responsibility The responsibility of the project fits a line project organization, where the project manager can be merely partly responsible for the project. Since the tasks necessary to reach the goals are split between various companies along the production line, the directive and thus responsibility does not lie with the project manager.

Support from initiator: Line organization, as the initiator (Lufthansa group) is permanently necessary to structure and advise the various other companies working on the project. Non-permanent project employees Matrix. There is no problem to integrate non-permanent project employees within the involved business units. The tasks are already clear and defined, which makes them easy to pick up for non-permanent employees.

Dimensions Risk As the project contains a lot of pioneer work in the fields of research and development as well as a high level of coordination, while the responsibility for sucess lies within the partner companies, we consider this to be a high risk project. Complexity The complexity of the project is very high, due to the amount of partners involved and the sheer size of the Lufthansa corporation itself. Time pressure A time limit is set, but it is not critical as the project was initiated by the company itself and underlies little external pressure. Time is rather a goal than a limit. Company culture The company culture can be described as conservative, as it is characterised by steep hierarchies, clear tasks and strict operational structures. The importance of the interdisciplinarity between Lufthansa and their partners is key in this project though, as the expertise necessary in the different fields cannot be provided by one person and thus underlies a high coordinational effort.

2.2 Operational structure (project phases) (Task 1d)

1. Information Phase: Research about the contribution of air transport industries in global climate change and information gathering in the fields of innovative green technology. 2. Developing Concept & Target sets: The industry experts develop a strategic research agenda and promote it among the aviation industries. The companies set goals for short- and longterm sustainability programs, bearing in mind economical profit.

3. Prototyping: Development of green technology and procedures as well as their trial on test flights and selected airport bases. 4. Participation & Coordination: Development, organization and implementation of cross-industry participation as well as promotion of the concept. 5. Evaluate & Publish: Evaluating the industry in regards of goal attainment and the effect on global climate. The final achievement report is published to the general public.

3. Project Initiation 3.1 Stakeholder Analysis (Task 2b) Aviation Benefits beyond borders (ATAG) ATAG is a global organisation based in Geneva, Switzerland that represents all sectors of the air transport industry. The mission of this organisation is to promote aviation’s sustainable growth and guide the air transport industries on concerns of global warming. Its members include airports, airlines, airframe and engine manufacturers, air navigation service providers and tourism and trade partners. It also provides information about the important role aviation plays in the economy and society.

Vision

Sustainable growth of air transport industries while limiting the environmental impact with technological progress in the aircraft manufacture, infrastructure and economic measures.

Strategic Goal

1. The air transport industries invest more to the innovation of technology and research for the alternative fuel. 2. Meanwhile, due to the research, the aviation industries are in sustainable growth while limiting their environmental impact. • •

Activities

• •

Innovation in aircraft and engine technologies Improved airport infrastructures More efficient aircraft sizes and optimized processes on the ground A global, sensibly designed, market-based system for reducing emissions to complement the other three activities.

Advisory Council for Aeronautics Research in Europe (ACARE) ACARE was established to develop and maintain a Strategic Research Agenda (SRA) that would help achieve the goals of Vision 2020. ACARE was launched at the Paris Air Show in June 2001 and attracted over 40 member organisations and associations including representatives from the Member States, the European Commission and other stakeholders:

manufacturing industry, airlines, airports, service providers, regulators, research establishments and academia. ACARE’s main focus then was to carry forward the SRA to influence all European stakeholders in the planning of research programs at European and national levels. The SRA is not a research program, but rather a roadmap outlining the strategic orientations necessary to be taken if Europe is to meet society's needs for aviation as a public mode of transport ,as well as noise and emissions reduction requirements in a sustainable way.

Airbus A commercial french aircraft manufacturer, with Space and Defense as well as Helicopter Divisions. Airbus is the largest aeronautics and space company in Europe and a worldwide leader. It promotes cutting-edge technologies and scientific excellence to contribute to global progress. Airbus encourages its industry-leading experts to push forward, moving the company into the Industry 4.0 era and inventing new possibilities for the future of aviation while promoting responsible, sustainable and inclusive business practices. Boeing Boeing is the world's largest aerospace company and leading manufacturer of commercial jetliners, defense, space and security systems, and service provider of aftermarket support. As America’s biggest manufacturing exporter, the company supports airlines and U.S. and allied government customers in more than 150 countries. Boeing products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems, and performance-based logistics and training. With corporate offices in Chicago, Boeing employs more than 153,000 people across the United States and in more than 65 countries, Boeing is helping build a more sustainable future for the aviation industry and our planet. In the past five years, Boeing reduced greenhouse gases, water use, hazardous waste and solid waste sent to landfill by up to 26 percent. Rolls Royce Rolls-Royce is a pre-eminent engineering company focused on the world-class power and propulsion systems. Rolls-Royce designs, manufacturers and distributes power system for aviation industries. It invest over £1.3 billion in research and development each year, twothirds of which aim for environmental performance improvement of new products and transition support to a low carbon global economy.

Goals

- Reduce energy used in operations and facilities by 30% before 2025. - Achieve zero greenhouse gas emissions in operation and facilities before 2030. - Reduce total solid and liquid waste in operation and facilities by 25% before 2025 - Zero waste at landfill in operation and facilities before 2020.

LSG Sky Chefs LSG Sky Chefs is one of the world’s largest airline and rail catering and hospitality companies. It offers complete catering programs in every price category for train and airline. Sky Chefs was founded by American Airlines in Texas in 1942, making it the oldest independent caterer in the world. LSG is founded by Lufthansa in 1966 as an independent company. In 2001, LSG fully acquired Sky Chefs and operated as LSG Sky Chefs, a part of the Lufthansa group, since. Today, LSG Sky Chefs delivers over 560 million meals a year and is present at 205 airports in 53 countries. Public In the next 20 years, it is predicted that the number of commercial airline travelers will double. This means that there will be more airplanes, more airports and more pollution. The public is aware oft he fact that aviation industries produce 2-3% of global greenhouse gas and start to demand more sustainable practice.

Fig. 1: Stakeholder Mapping

Conclusion ATAG and ACARE are global organisations with the mission of sustainable air transport addressing the air transport industries. They have a very high attitude towards the sustainability of air transport but no authority to issue directives to the companies. ACARE is established in Europe by a Group of representatives from member states and stakeholders from aviation industries, therefore a german airline does good by following their advices. They are not obligated though.

The Public is aware of the global climate change and demands sustainable solutions. While they also lack executive power, they form the largest part of the companies customers and are thus essential for the future economic success of Lufthansa. LSG Sky Chefs is part oft he Lufthansa group and thus encouraged to work towards a better approach to recycle food and plastic waste. It is a subsidiary for Lufthansa Group, though. Other stakeholders project partners such as Boeing, Airbus, Roll-Royce are powerful suppliers. As they have the power to decide how they manufacturer aircrafts and engines, they supply the base to reach the goal of more efficient and sustainable air travel.

3.2 Target specification (Task 2d) The main goals include a reduction of carbon and nitrogen oxide emissions. Until 2020, Lufthansa strives for an increase in energy efficiency of 1,5% per year and CO2 neutral growth from there. An overall CO2 reduction of 50% ist he goal for for 2050. Supporting the goal of the Advisory Council for Aviation Research and Innovation in Europe (ACARE), nitrogen oxide emissions should be reduced by 80 percent until 2020. The Group has firm orders for 210 aircrafts with delivery dates by 2027 to modernize the fleets and keep up with the green technologies offered by the aircraft manufacturers. Furthermore, the Lufthansa Group is involved in various research institutions and industry associations developments on the subject of alternative fuels. One of their newest clous is turning used plastic glasses from the cabin service into synthetic crude oil later used to generate aircraft fuel. The already mentioned goals are supported by striving for increased operational efficiency and improved infrastructure. This includes optimum flight routings and flight speeds, efficient aircraft capacities, programs for longterm weight reductions on board and optimum aircraft loading procedures. Another topic going hand in hand with the technical advancement ist he reduction of noise....