LAN Chile was the most successful Latin American airline of the late 1990's. Despite upheaval in the industry and failures of several other airlines in the region, LAN Chile had a record of success and international expansion that were the envy of the industry.
The least aviation news report has shown that the success of Chile's flagship airline LanChile, which tripled third-quarter profits from a year ago, is due to a deregulated air traffic market, efficiency and concentration on international flights.
This report aims to fulfill the following objectives:
1. Evaluate the success of LAN's strategy so far. Strong points / Risks?
2. Give opinion on the last section of the case 'Challenges to Lan':
a. How can they grow further under the constraints given?
b. Is the relationship with American Airlines a good thing for LanChile? Going forward or not? Why & what are possible alternatives?
2. Question1. Considering Evaluate the success of LAN's strategy so far. Strong points / Risks?
The leaders of LAN Chile have set up a serial strategy for company's panoramic future plan. These goals are being pursued actively since the mid-1990s, with significant success in building the cargo leadership with a hub in Miami and in linking with American Airlines and the One World Alliance. However, LanChile's management is a key to its success. With slack demand in the domestic market, the company's strategy has focused on international flights that account for 85 percent of revenue.
Let's carry out an analysis using the Strong points and risks framework helps us to focus on what are the strong points and risks for LanChile' strategy:
2.1. Strong points:
Management of LAN Chile's has set up a very clear mission.
Ownership was simplification. LAN Chile had completed privatization...