Classic Airline

AIRLINES

Problem Solution: Classic Airlines

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Describe the Situation

Issue and Opportunity Identification

Classic Airlines commands a fleet of more 375 jets that serve 240 cities with more than 2300 daily flights. In the 25 years since it inception, Classic Airlines has grown to an organization of 32000 employees, and it earned $10 million on $8.7 billion in sales (Simulation, 2009). Classic in no stranger to the challenges that plague today’s airlines. Increased uncertainty about flying has affected industry stock prices across the board, and Classic has seen a 10% decrease in share prices. The airline has been operating under a microscope watch, subject to scrutiny from all sectors.

Consumer confidence also appears to be reducing. 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 (Simulation, 2009). This gives Classic Airline an opportunity to identify their program and come up with solutions such as an alliance with another company and/or beef up their Customer Relationship Management (CRM) program implemented four years ago.

In addition, the raising cost, particularly of fuel and labor has limited Classic’s ability to compete for the valued frequent flier. To alleviate this problem, Classic’s Board of Directors recently mandated a 15 percent across-the-board cast reduction (Simulation, 2009). Although Classic has charge the company to implement a cost reduction, they must still find a way to increase its frequent flier program with methods that will demonstrate a measurable return on any investment.

Stakeholder Perspectives/Ethical Dilemmas

Classic stakeholder perspectives are to increase profitability and market share. It must also strengthen its programs and competitive position, while reducing their costs. The ethical dilemma that...