Competing with Pirates

Cover stories · Cases

This article is a revised edition of a former publication in ManagementSite. This revised edition is dated 05-02-03.

Low-cost airlines offer tickets for as less as one third to one tenth of the prices flag carriers such as Lufthansa, British Airways, KLM, and Air France charge. At first sight, this seems to result in a crash, but on further consideration it turns out to be a huge success formula. The interesting question is: how can start-ups be successful with a low-cost strategy in spite of their often significant initial losses. The aviation industry shows it can be done. Even more so, start-ups should turn to this strategy a lot more often. In this ar...

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