LEVEL Travel: Tourism – It's Your World

International Airlines Group (IAG), an Anglo-Spanish multinational airline holding company, launched a new low-budget and long-haul airline by targeting young people who are often restricted by the cost of long-haul travel.

Challenge, context & objectives

When we were first briefed in November 2016, there were 11 Long-Haul, Low Cost (LHLC) carriers operating (excluding charters), in a growing sector led by Norwegian .

A profitable entry into the sector was made possible for IAG by cost advantages arising from new generation aircraft, lean operations, lower labour costs and higher seat density. Any new launch would need to complement the existing brands within the IAG stable. Without a LHLC brand in its portfolio, IAG was vulnerable to competition from Norwegian and others, but with one there could be a risk of undermining the...

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