European Airline Industry: Lufthansa in 2003

Case Writers: Alessandro BUCCELLA and Herman FUNG

This case forms part of a series with “Note on the European Airline Industry” and “European Airline Industry: Ryanair in 2003”, but can be used independently. The case describes the strategy of Lufthansa as a major network carrier in Europe. It also describes the entry of low-cost carriers in the German market. The case describes the strategies used by other incumbent airlines in defending against the entry of “low-cost carriers”, ranging from imitation, to entry preemption and deterrence.

This case can be used to explore the following themes:

How an incumbent can respond to industry entrants with distinct advantages
The constraints that limit competitive responses by incumbents
Whether and when entry preemption and deterrence is a viable strategy