Classic

Classic Airlines

Mishaal Luz

University of Phoenix

MKT/571

Greg Luce

March 1, 2010

Classic Airlines

Classic Airlines is one of the world’s largest airlines with a fleet of more than three hundred seventy five jets serving to two hundred forty cities. The organization has grown to 32,000 employees since its existence. In the previous year, the organization recorded a $10 million dollar profit on a $9 billion total in sales. Even though the airline was proven to be lucrative, their share price has declined in the last year or so. This in turn causes employee’s morale to be at its lowest peak as a result of an investigation on the airline industry. Classic Airline’s customer loyalty program is on the decline as substantiated by a nineteen percent decrease in the amount of Rewards members and a twenty percent reduction in flights per member that was left behind as of January 2005. In addition, the company is in the verge of a preventive outlay restructuring due to an excessively optimistic development plan that was based on expected rebound of travel after the catastrophic event of September 11. The entire Airline Industry is facing numerous challenges especially in the current economic environment. A global economic slowdown, caused by the September 11th attacks, has led to a turn down in travelers, unrelenting yield decline, and rapidly increasing fleet and insurance, labor cost. The company’s Board of Directors authorizes a fifteen percent reduction of cost all throughout the organization over the next year and a half. In addition to the directive, Classic desires to develop its frequent flier program with a system that will reveal an outstanding return while still in line with the company’s overall goal of reducing cost.

Issue and Opportunity Identification

Classic’s customer confidence is diminishing as well as the Rewards Program they have in place, it is measured to be at a nineteen percent decrease in the amount of membership for...