Classic Airline Solutions

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Classic Airlines Marketing Solutions

Classic Airlines is a company dealing with increased costs in labor and fuel costs that have resulted in a reduction of bottom line profits in 2004 of over $60 million, while only growing the revenue side by 1%. At the same time the loyalty program has decreased by 19%, and current members are flying 21% less than prior year. Overall the loyalty customers were flying less with Classic and the remaining members flew at a decreased cost in 2004, with a rate decrease of 23% for domestic travel and 19% for worldwide travel. With the combination of reduced fares, increased costs and the pressure of a declining stock price, Classic is in a position of necessary change, and will review ways to reduce expense at the 15% level mandated by the Board of Directors, while still working to maintain current customer base, and attempting to grow the loyalty program. All of these areas of concern have created a reduction in employee morale, and the executive management team will need to work to engage all levels of the organization to improve service levels, and regain the customer trust and loyalty to ensure long term success at Classic.
Describe the Situation Classic is in a position of vulnerability with the pressures that it is facing from Wall Street, consumer confidence, as well as pricing and mandated cost reductions. With all of these impacting the employees and the rumor of potential bankruptcy, employee morale is at an all time low. The low employee morale has the potential to continue to have a negative impact on the bottom line results of the company, at a time in which Classic needs the entire work force to join in and fight to improve the results for the company, to help eliminate the current pressures that it is facing and allow for long term sustainability. It will require buy in from all levels of the organization for…...

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