Should Finnair launch a long-haul low-cost airline?
Finnair is a full-service carrier that has largely escaped direct competition with low-cost carriers. The airline CEO has been quoted as saying that only 10% of their routes are subject to low-cost competition. However, the rise of Norwegian cannot be ignored. To that end, Finnair has asked you, as an independent consultant, to produce a report on the prospects for the establishment of a long-haul low-cost airline
- What are the elements of a successful long-haul low-cost airline? You should review not only the theoretical model but demonstrate how well these elements have worked in practice.
- How should Finnair go about selecting the routes that might support a long-haul low- cost model? How would you deal with integration within Finnair’s existing network?
- What specific practical challenges would Finnair face should the airline decide to launch its own long-haul low-cost airline? You need to discuss commercial, financial, engineering and operational issues.
- You must produce a clear risk analysis, identifying and addressing the key issues. Finally, you should present a recommendation to Finnair, backed up with arguments.