Situation Analysis: Classic Airlines
Classic Airlines has grown to an organization of 32,000 employees since starting operations. Last year the company recorded $10 million profit on $8.7 billion in sales. While the airline is profitable, the stock prices have decreased by 10% in the past year and employee morale has been at its lowest due to increase scrutiny on the airline industry from all sectors of the economy. (Classic Airlines, 2008) Classic Airline's customer loyalty is on the decline as evidenced by the 19% decrease in the number of Classic rewards members and 21% decrease in flights per remaining member. The company is also facing a restrictive cost restructure due to overly optimistic expansion plans based on anticipated
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Therefore, the methodology used and the operational philosophy of Classic needs to be aligned with such a strategy. These issues have created opportunities for Classic Airlines to address the root cause of the problem. Additionally, the paper will discuss the situation, stakeholder perspectives, ethical dilemmas and the end-state vision for classic airlines.
Describe the Situation
Issue and Opportunity Identification
A main issue for Classic Airlines is the continued declining stock price due to failed customer service programs, which has caused the stock to fall 10 percent from the previous year. Symptoms of this main issue include 19 percent decrease in the number of Classic Rewards members, rising fuel, labor cost, and a mandate for a 15 percent cost reduction over the next 18 months by the Board. Classic Airlines has an opportunity to change these issues in to turn positive outcomes. Classic Airlines has created a Classic Reward team that includes Chief Marketing Officer Kevin Boyle, Vice President (VP) Customer Service Renee Epson, and Senior VP Human Resources John Hartman has been challenged to redesign the rewards program without lowering the price or incurring more cost. The Classic Reward team came to an agreement that the customer service is the main issue at Classic Airlines. Classic
“A Tale of Two Airlines” is an article written by Christopher Elliott to educate to economy on travel planning. He was born on May 31, 1960. He is a journalist and consumer advocate who writes for people who want to become more informed travelers (www.nbcnews.com/id/10912488/ns/travel/t/Christopher-elliott/#.Vc_RIO9RGM8). He is known for his many articles with the National Geographic Traveler Magazine and being a travel columnist with the Washington Post and USA Today. A Tale of Two Airlines or is Good Vs Evil in the air; Southwest Airline vs Spirit Airlines.
This report largely focuses on constructing a situational analysis of Qantas Airlines. An organisations situational analysis refers to an analysis that consists of ascertaining the key factors that will be used as a basis for development of marketing strategy. (Elliot 2014). Situational analysis consists of the environment analysis (both internal and external environment), competitor’s analysis and finally the swot analysis.
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The purpose of this memorandum is to address the profitability issues at Continental Airlines and to estimate the costs for 2009 to forecast the future outlook of the company. To address these issues, I used regression analysis to observe what effect the 11% reduction in flying capacity would have on the firm’s future operating costs. I also used the results from the regression analysis to verify the costs that, if reduced, would further comply with the implementation of cost-cutting initiatives and operational efficiencies that the company is striving for. Lastly, I consolidated the data to forecast Continental’s financial outlook for 2009, then provided insight
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2. The London based Airline could have verified their passenger list and should have identified Prof. McPherson as a Gold card member and a loyal customer and should have taken any one of these actions based on the situation:
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Launched just 8 years ago, today, the Jetstar Group consists of a network of value-based air carriers that deliver high quality air passenger services for budget-minded travelers across Australia, New Zealand and the Asia Pacific region. Beginning with just 400 employees, the company currently employs more than 7,000 people and carries about 20 million passengers a year. To gain some insights into how the Jetstar Group achieved this impressive growth in such a short amount of time, this paper provides a review of the relevant literature concerning the air passenger industry in general and the business strategy used by the Jetstar Group in particular. A summary of the research and recommendations for this company are provided in the paper's conclusion.
In April 1992, American Airlines launched "Value Pricing" -- a radical simplification of the complex pricing structure that had evolved over more than a decade following deregulation of the U.S. domestic airline industry. American expected that the new pricing structure would benefit consumers and restore profitability to both American and the industry as a whole. The critical issue raised is: Would American's bold initiative work?
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Upon review on a profile of a successful company we see Southwest Airlines as a prime example. Their ability to recognize weakness in their management system and adjust strategies has allowed them to emerge as a leader in the US airline industry. Southwest is the largest US low fare carrier with low fare rates, no additional fees and excellent customer service. Southwest Airlines currently has one of the most innovative management practices in the US to date. A review of the critical elements of Southwest Airlines proves to be effective and innovative.
result of this, no other airline in the industry’s history has enjoyed the customer loyalty and
Classic Airlines consists of 375 aircraft that travel to 240 cities more than 2300 times per day with a workforce of 32,000 personnel. Classic Airlines’ revenue was in excess of $8.7 billion last year bringing in a $10 million dollar profit and establishing the airline as the fifth largest air travel company in the world. Despite good sales and profits, Classic Airlines has been receiving harsh criticism from their customers resulting in a 10% decrease in profit shares, reduction in customer loyalty, 19% drop in rewards customers, 21% reduction in flights and the lowest morale seen in recent years. Classic Airlines remains optimistic about customer flight travel but must find