Need help with my writing homework on Strategic Management at Lan Airlines. Write a 1500 word paper answering; Tangible assets of the airline also supported this model. The other large domestic airlines usually had single-aisle planes and they did not have the capacity to start a cargo business, therefore, Lan Airlines’ expensive assets created an opportunity to introduce strong cargo business. Pursuing this strategy could ensure a better cost structure of the airline. Another good strategy of the company to manage cost structure of both the cargo and passenger business was the use of key cost measure “Cost per available ton kilometre (ATK)” rather than “Cost per available seat kilometre (ASK)”. Although airline was using ASK as a cost measure on some of its domestic routes, however, as ASK excludes cargo business and Lan had to take into account both the availability of passengers and cargo, therefore, Lan did not use ASK. A mix of cargo and passenger services is also because of the advantage of Lan over its competitors. Lan Airlines was carrying cargo in the belly of the passenger planes whereas the other airlines were not able to pursue this strategy because Lan had the specialized cargo planes to support the operations. The company had 83 planes, 43 on lease and 40 were owned. Out of 83, 73 planes were passenger planes and 10 were cargo-only planes and the company tried to use the large cargo planes on the routes where the cargo demand was high. Another reason because of which Lan has been able to carry both of its services efficiently was the flexibility and work ethics of the staff of the airline. Within a short period of time, Airline was able to bring changes in its schedule and plan. The combination of passenger and cargo business offered various advantages to the company. The airline was offering flights to 62 passenger destinations and 16 cargo destinations.
Recent Comments