Lan Airlines in 2008: Connecting the World to Latin America (with Ramón Casadesus-Masanell and Jordan Mitchel).

Published by:

Harvard Business School Publishing.

Product number: 709410

Revision date: August 4, 2009.

Description

Lan Airlines operates three distinct models: low-cost for domestic short-haul flights, full-service for international routes; and an international cargo business, the latter of which makes up 33 percent of Lan’s overall revenues (markedly different from many U.S. legacy carriers which derive 3 to 4 percent of revenues from cargo). Since a change of ownership in 1994, Lan has grown steadily and quickly at a compound annual growth rate (CAGR) of 19 percent from $318 million in revenues to $3.5 billion at the end of 2007. Lan is at an interesting point in history as the low-cost model was recently implemented. While early results have been strong, observers wonder if the airline can successfully manage three disparate business models.

Learning Objective:

To understand how business models lead to a competitive advantage.

Subjects Covered:

Business growth; Business models; Business policy; Competitive advantage; Global business; International business; Strategy

 

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