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This interactive case analyzes the dilemma that Iberia was facing in the year 2004 due to the entrance of low cost airlines into the Spanish market specifically in Barcelona. The case presents different options that students must evaluate.

It describes the history of the company until 2004 and makes a detailed comparison of the two business models: in network (the model used by Iberia) and the one that the low cost airlines use.

This case is designed for a Competitive Strategy course, especially for MBA. The case mainly serves to analyze the cost advantage, discuss the design of the strategy when the environment’s characteristics change and practice the identification and evaluation of strategic alternatives. It is a case that can be useful as a summary of the first part of the course on Competitive Strategy.