Classic Airlines

Running head: Classic Airlines Problem Definition

Classic Airlines – Individual Assignment

Classic Airlines

Classic Airlines has had its ups and downs, just as the other major airline companies have, especially since the September 11th attacks that literally shut down U.S. air traffic. Despite rising fuel prices, homeland security threats and the onset of online travel sites, Classic Airlines has maintained its position as one of the top five commercial airlines. As outlined here, there are various issues that affect any company at any one time. For Classic Airlines, the main issue is the current state of the frequent flier program.

“By January 2005, Classic’s declining Classic Rewards program measured a 19 percent decrease in the number of Classic Rewards members, and 21 percent decrease in flights per remaining member” (rEsource, 2007).

Detailed in this report are suggestions that include avenues for improving customer satisfaction and loyalty, all of which start off with the identification of the major issues facing Classic Airlines.

Describe the Situation

Issue and Opportunity Identification

Identifying the issues at stake for Classic Airlines is the first step in overcoming the existing obstacles. Then, capitalizing on the available opportunities will allow the company to regain its status as a formidable competitor in the commercial airline industry. But, one issue that haunts the industry is the similarity amongst the different carriers. “…product differentiation… involves a firm's using different marketing mix activities, such as product features and advertising, to help consumers perceive the product as being different and better than competing products” (Kerin, Hartley, Berkowitz and Rudelius, 2006). Setting itself apart from the competition will allow Classic Airlines to reap the benefits of the opportunities outlined here (while mitigating the issues also listed).

The first major obstacle for Classic is the dropping...