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LoFare Airlines

This is a simple, self-contained PC application, for use by small teams – rather different from the complex, large-scale business games that take days to run and place big demands on instructors. The industry setting and business model is familiar to just about everyone, making it easy for any audience to understand and relate to the game.

The game plays out business performance over a long enough time-scale to experience the complexity of strategy and decision-making. Each quarter, teams need to open new routes before competitors do, and provide enough aircraft to serve those routes. And they must set pricing and marketing that encourages new customers, while making sure they stay ahead of competitors and remain profitable.

Teams build and operate a low-fare airline at any time from the birth of the industry to its maturity – a total of 20 years, though you can run shorter periods within that life-cycle!

Teams The game is best used by teams of no more than 5 people in break-out rooms, but short games can also be used by smaller teams (3 is ideal) within a larger class-room. Teams dispersed over different locations can play the game together by using conferencing systems that enable screen-sharing, such as Join.Me, Skype, Webex or Adobe Connect.

Strategy choices There is no fixed 'market size' out there, and no point doing 'market forecasts' – market growth depends on how fast you and rival airlines develop the opportunity. Early in the market’s life, you have some choices, such as:

  • Open a few routes and add some aircraft, then price just low enough to keep the aircraft ‘load factor’ (fraction of available seats sold) high, which will make sure you are profitable.
  • Or you could be more ambitious, opening routes as fast as you can, adding aircraft quickly and pricing much lower than the big full-service airlines to create and capture the huge market potential, and to stay ahead of low-fare competitors.

As the market matures, you have other choices, such as whether to keep trying to take business from other low-fare and full-service airlines, or switch to a strategy of defending what you have and delivering strong cash-flow.

Success To deliver strong, profitable growth, teams must:

  • assess the scale and profit potential of the emerging market opportunity
  • balance efforts to grow customers and sales with the capacity to serve them well
  • … but make sure capacity is fully utilised to remain financially viable
  • select the right approach to competitors – being aggressive if that would grow strong cash flows, but more cautious when open warfare risks damaging the business

Scenario challenges The LoFare Airline simulation allows teams to tackle these issues from several different situations – a start-up business trying to capture a very large opportunity before others do so, a later entrant that wants to catch and overtake competitors who are already driving forward quickly, or a large and established business in a mature market with little remaining growth. The game can also be set up with competitive conditions that range from rather gentle to very aggressive.

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The LoFare Airlines Microworld has been selected as a complementary simulation to Contemporary Strategy Analysis by Robert Grant.

Registered teachers can request free evaluation licences and access to Inspection teaching material.

If you hold an academic post registration is free - use our contact form to register and request registration as a teacher.

Videos

One minute overview: (no sound),
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LoFare Airline Microworld Tour
(26 minutes)
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Strategy frameworks for LoFare Airlines
(48 minutes)
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