Inefficient numbers and overly intricate organization: Lufthansa is clearly planning a significant restructuring.

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Lufthansa, Germany's flag carrier, plans a massive overhaul named "Matrix Next Level" to optimize its organizational structure.

This ambitious project, spearheaded by CEO Carsten Spohr, seeks to modernize and streamline Lufthansa's complex structure. Consulting giant McKinsey has aided in the preparations.

The intricate network of 12 passenger airlines and two cargo airlines within Lufthansa has historically shown signs of inefficiency. "Matrix Next Level" is intended to remedy this. According to reports, Lufthansa aspires to revamp its entire structure under this new moniker.

The specifics of this restructuring are still under wraps. However, the future looks promising with plans for a more centrally managed and integrated system. As per sources, several subordinate projects such as One IT, One Admin, and One Excellence are set to be introduced.

McKinsey's Role in Old and New Structures

McKinsey, responsible for engineering Lufthansa's original matrix structure, has reportedly assisted in the creation of the "Matrix Next Level" as well. The consulting firm's involvement ended in April, and Lufthansa is now steering the restructuring project alone.

Last fiscal year, Lufthansa's earnings before interest and taxes dropped by approximately one billion euros. In contrast, rivals such as British Airways and Iberia recorded profits in the first quarter of this year.

Anticipated Changes and Centralization

The conception of a more centralized organizational structure aims to simplify processes and reduce complexity across Lufthansa's various subsidiaries. This streamlining endeavors to generate savings while fostering improved coordination among entities.
The new structure considerable effort to become a "matrix" organization model. This model encourages cross-functional collaboration and speedy decision-making, thereby supporting agility.
The restructuring is geared towards centralizing corporate functions such as IT, administration, and operational excellence. These functions will be consolidated under unified frameworks to improve resource utilization and service quality.

Subordinate Projects within the Restructuring Plan

One IT

One IT, a cornerstone of the transformation, focuses on consolidating and standardizing IT systems and infrastructure across Lufthansa Group companies.
The ultimate objective is to accelerate digital transformation by adopting uniform platforms and digital tools that reduce duplication, improve data integration, and boost operational reliability and customer experiences.
Lufthansa is partnering with Infosys to speed this process up, underscoring a strategic push to bolster IT prowess[2].

One Admin

One Admin targets centralizing administrative functions such as finance, human resources, and procurement.
The goal is to establish shared service centers that provide consistent standards and higher operational efficiency, while keeping overhead costs in check and delivering a uniform employee and supplier experience.
Centralization of administrative work allows resources to be allocated for core activities and enhances governance.

One Excellence

One Excellence concentrates on enhancing operational processes and customer service standards across the group.
Its mission is to instill a culture of excellence and innovation, focusing on best practices, quality assurance, and performance measurement.
It serves as the driving force behind organizational excellence, ensuring that structural changes translate into tangible benefits for both customers and employees.

Under "Matrix Next Level", Lufthansa's transformation reaches beyond superficial changes and delves into an overhaul of their organizational structure. Its three subordinate projects (One IT, One Admin, and One Excellence) are instrumental in the airline's pursuit of a more efficient, agile, digitally-advanced, and customer-focused future.

Though the exact details and timeline of the "Matrix Next Level" plan remain largely confidential, the strategic emphasis on digital transformation, centralization, and operational excellence is evident from recent corporate announcements and partnerships [2].

-What is the intended goal of Lufthansa's organizational structure overhaul called "Matrix Next Level"? It aims to create a more centralized structure to simplify processes, reduce complexity, generate savings, and improve coordination across various subsidiaries, ultimately leading to a matrix organization model that encourages cross-functional collaboration and swift decision-making.-In order to accelerate digital transformation and improve resource utilization, Lufthansa's "Matrix Next Level" plan includes the subordinate project One IT, which focuses on consolidating and standardizing IT systems and infrastructure across the Lufthansa Group companies, with the ultimate objective of adopting uniform platforms and digital tools that reduce duplication and boost operational reliability and customer experiences.