LoFare Airlines Microworld

In this game, your team build and operate a "low-fare" airline, such as Ryanair (Europe), Southwest (USA) or Air Asia (Far East) at any time from the birth of the industry to the time when the market is saturated and mature – a total of 20 years (though you do not have to do all of that!).

There is no fixed 'market size' out there, and no point doing 'market forecasts' – the market's growth depends on how fast and how well 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 major ‘full service’ airlines to both develop 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. Teams gain valuable insight into important issues common to other business situations, such as:

• assessing the scale and profit potential of an emerging market opportunity
• making sure to balance efforts to grow customers and sales with the capacity to make sure they are well served
• ... but making sure that capacity is fully utilised to keep the business financially viable
• selecting the right approach to competitors – aggressive when that would lead to strong cash flows, but more cautious when open warfare risks damaging the business

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 rivalry up to very aggressive competition.