In early 2008, Enrique Cueto, CEO of Lan Airlines, was reviewing results from 2007. All divisions had enjoyed strong increases: domestic passenger traffic shot up by 23.5 percent, international passenger traffic rose 23.1 percent and cargo traffic advanced 4.8 percent. Much of the strong growth of domestic passenger traffic had been attributed to the company’s adoption of a “low-cost” approach on short-haul national routes in April 2007. Internationally, Lan had grown traffic by expanding routes through its wholly owned subsidiaries in Argentina and Peru and continuing to offer a far-reaching route network for full-service long-haul flights to North America, Europe, and beyond. In its cargo business, Lan set itself apart from U.S. legacy carriers, which derived between 3 and 4 percent from cargo, since 33 percent of Lan’s revenues came from cargo.

This case has been designed for a section of the Strategy course where business models are analyzed in isolation. The case look at the role of Lan’s three different business models and how they work together.

Publicado en Harvard Business School Publishing.

Harvard Business School Case: Product number: N9-709-410