Company

Icelandair, an airline company with more than 80 years of history. 

Situation

Icelandair's 80-plus-year history and hybrid business model -- straddling a full-service carrier and a low-cost carrier (LCC) model -- examined in five crucial moments:

• CASE A: Competition. Early 2017, in the airline's 80th anniversary year, Icelandair faces rising operational costs combined with extreme pricing pressure from upstart LLC competitor WOW air.

• CASE B: Management. August 2018, the group's CEO resigns.

• CASE C: M&A? November 2018, WOW is on the edge of bankruptcy and Icelandair weighs the option of acquiring it.

• CASE D: Operational setbacks. April 2019 sees the forced grounding of all six of the company's Boeing 737 Max airplanes and rumblings that the now-bankrupt WOW Airlines is trying to re-emerge.

• CASE E: The pandemic. March 2020, the COVID-19 crisis essentially pulls the plug on global air travel.

Takeaways

Among other lessons students will: 

• Debate the airline’s hybrid model in light of the competition

• Understand the concepts of external and internal consistency in a business model

Audience

This case study can be taught in undergraduate, MBA or executive classes and ideally is spread over two classes where Part A is done in the first session and the remaining cases in the second session.