Should Finnair launch a long-haul low-cost airline

Should Finnair launch a long-haul low-cost airline?

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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

1. 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.
2. 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?
3. 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.
4. 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.