Lufthansa is the largest carrier in the world by revenue but, as with many of its competitors in Europe and the United States, the global downturn has taken its toll.
Lufthansa out to swoop on Gulf's Etihad, Emirates and Qatar Airways
Lufthansa's flying crane is one of the most enduring design images of the 20th century.
Originally drawn in 1918, it has remained unchanged since it first adorned the airliners of Germany's national carrier, from its launch in 1926.
It's a heritage that is being mobilised by the airline as Lufthansa begins its fight back against the three big Arabian Gulf carriers and their ongoing grab for passenger share across the globe.
"Lufthansa relaunched in 1955. That is almost 60 years of solid German virtues we have behind us now," says Carsten Schaeffer, the airline's vice president for sales for all points east.
"We are known for reliable consistent performance, trusted professional pilots and a maintenance reputation second to none. Our heritage is a trump card you cannot buy and it is one we mean to play."
Since their launch, the three big Gulf carriers, Etihad Airways, Emirates Airline and Qatar Airways, have been working to a tried and tested passenger-generating strategy built around the idea of "hubs".
Pioneered by the Americans in the post-Second World War years, it simply involves flying lots of feeder flights from remote airports to a big central one and then flying the passengers onwards to the long-haul destinations they ultimately want to reach.
Over the past 15 years the Gulf three have been doing just that, building a passenger base by flying people from Europe to South East Asia, India, Africa and Australasia via their hubs at Doha, Abu Dhabi and Dubai. And now the economic balance is tilting east, they are beginning to fly people from China and India west beyond Europe to the Americas.
Last year, after just a decade in business, Etihad carried more than 10 million passengers for the first time. And between April and November, Emirates Airline carried 18.7 million passengers, up 15.4 per cent on the same period a year earlier.
Meanwhile, the big European, Asian and Australasian carriers are stalling - airlines such British Airways, Air France, Singapore Airlines and Qantas. In its review of last year's airline performance, the International Airline Transport Association (Iata) said although the region's carriers did better than predicted, the environment was still tough.
"European airlines' passenger traffic expanded 5.3 per cent in 2012, sharply down on the 9.5 per cent growth of 2011," Iata reported.
"[Although] growth was generated by the long-haul performance of euro-zone airlines, around a quarter of the growth in European airline international traffic came from airlines outside of the euro zone. [Meanwhile] Middle East airlines contributed almost a third of the total expansion in international passenger markets with 15.4 per cent growth, ahead of the 8.9 per cent growth recorded in 2011."
The resulting friction finally spilt out in some intemperate remarks about the Gulf carriers flying out of "a sandpit" with a "box of money" attached, from Christoph Franz, Lufthansa's chief executive.
In context, however, what he actually said was a pithy summing up of the Gulf carriers' success and the European airlines' weakness.
"I'd like to answer with a picture. Let's imagine - purely theoretically - a country in which nothing exists besides sand and a box of money," Mr Franz told Germany's Manager Magazin last May. "What do you have to do to develop this country economically? First you have to build a runway and to establish a national carrier - just to bring this country on to the world map and to support trade, the tourism sector and to invite industry. The Gulf countries understood that aviation industry is a motor for economic development," he said.
"In contrast to this position we in Europe see this motor more and more only as a source for taxes or as a source of noise. I think we have to change our thinking fundamentally in regards to this."
So, with no sign Germany is going to abandon its flight tax, or the European Union its carbon emissions levy, this year Lufthansa, the world's biggest airline group by revenue, is changing its own thinking. And it is doing it on a number of levels.
First, there will be structural changes in the way the airline operates, then the face the airline presents to its passengers will deliver a major upgrade.
"Germany is about style," says Mr Schaeffer.
"So you will see sophisticated German design in everything we do. From the seats on our planes to the smooth, seamless systems we are implementing to move our passengers from ticket purchase to their destination."
The major structural change this year will be the transfer of short-haul point-to-point flights within Europe to its no-frills Germanwings brand. While flights to and from its hubs in Frankfurt and Munich, which connect with long-haul services, will remain Lufthansa-branded, Germanwings will offer a lower-priced alternative on routes such as London to Stuttgart, or Berlin to Hanover. Germanwings will have 89 aircraft, fly to more than 110 European destinations and is expected to serve 18 million passengers this year.
Its part of a package designed to boost annual earnings by €1.5 billion (Dh7.42bn) from 2011 levels by the end of next year.
The customer-facing upgrades will be more far-reaching.
"We have been working through 23 different focus groups, selected from members of our frequent-flyer programme, to come up with just what our passengers want," says Joachim Schneider, Lufthansa's vice president of product management.
The airline is investing €3bn in introducing new first and business-class seats, a premium economy section for the first time and complete interior makeovers for all its long-haul fleet. The consulting process has thrown up some interesting results, says Mr Schneider.
"In first class we thought about suites but the focus groups said no. They wanted a calm, stylish, open lounge style. We thought about installing showers but our passengers again said no. Everybody would want to use them at the same time, before landing. So we opted for welcome lounges on the ground," he says.
"Seat clinics" involving some 500 volunteer testers garnered from fare-paying passengers refined the seat designs in both premium classes, delivering a design that costs as much as a standard Mercedes saloon car to manufacture for the first-class seat, while two business-class flatbeds would cover the cost of a base-level BMW.
"It's a delicate process, involving your customers. The late Steve Jobs of Apple once said, 'The customers don't know what they want,' but we've found by applying some basic psychology to what we ask, we end up with the right product," says Mr Schneider.
"Certainly the customers love it, being part of designing a new aircraft. But our experience and tradition finally decides what will work and what will not."
The process also requires Lufthansa works closely with its suppliers.
"We are not an 'off-the-shelf' customer," he adds. "So we like to work closely with our suppliers to get what we want."
The airline has a track record in getting what it wants. It was Lufthansa that coerced Boeing into building the Boeing 737 back in the 1960s. "When Boeing was thinking big with the 747, we were thinking small. They didn't want to do it, but who was right? It has gone on to become the biggest-selling airliner of all time," Mr Schneider says.
There will also be a big push to have customers link to Lufthansa from their phones and tablets; an entire tracking system for journeys that can alert passengers to delays and even re-book them on Deutsche Bahn - German rail - if snow grounds their flight.
Lufthansa launched its first mobile website in 2007 and has watched mobile become an increasingly important marketing channel, with its portal getting 140,000 daily visitors, 300,000 e-boarding passes per week and 1,000 new bookings per day.
"Lufthansa is widely considered to be the global benchmark in mobile aviation services and commerce," says Joachim Bader, the executive director at SapientNitro, a Lufthansa mobile services provider.
"After two years in very successful service, [we have seen] a steep increase not only in usage of services like check-in, flight plan et cetera but also in booking numbers and ticket sales and, after collection and analysing customer feedback, we saw the need of improving the Lufthansa services to address the customer needs even better," he says.
On the ground, premium lounges are being upgraded and in the air there are 168 new aircraft on order.
The aim is to establish Lufthansa as the premium airline of choice for passengers moving to and from Europe from all points south and east through its two main hubs, at Frankfurt and Munich.
In other words, to play the Gulf carriers at their own game.