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Published by: Harvard Business Publishing
Originally published in: 2008
Version: 4 August 2009
Notes: To maximise their effectiveness, colour items should be printed in colour.

Abstract

Lan Airlines operates three distinct models: (1) low-cost for domestic short-haul flights; (2) full-service for international routes; and (3) an international cargo business, the latter of which makes up 33 percent of Lan's overall revenues (markedly different from many US 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 USD318 million in revenues to USD3.5 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.
Location:
Industry:
Size:
USD3.5 billion revenues, 15,800 employees
Other setting(s):
2008

About

Abstract

Lan Airlines operates three distinct models: (1) low-cost for domestic short-haul flights; (2) full-service for international routes; and (3) an international cargo business, the latter of which makes up 33 percent of Lan's overall revenues (markedly different from many US 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 USD318 million in revenues to USD3.5 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.

Settings

Location:
Industry:
Size:
USD3.5 billion revenues, 15,800 employees
Other setting(s):
2008

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