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    Problem Solution: Classic Airlines

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    Using the Problem Solution Template, develop a solution to help Classic Airlines. Remember that your solution needs to focus on the marketing and customer relationship concepts covered in the course. Be sure to incorporate appropriate citations from your readings and research.
    NOTE: The word count includes the tables.

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    The response addresses the queries posted in 3571 words with references.

    //Before inscription of the problem solution for the Classic Airlines, we first need to give a brief introduction about the company and its position in the airline industry. Moreover, the challenges faced by the industry and the company are described. So, I will start by writing about the company's situation, as under the heading of Classic Airlines, for example://

    Classic Airlines

    A classic airline maintains a workforce of nearly 32000 employees and currently ranks on the fifth position in the world. The organization operates with more than 2300 flights in nearly 240 cities and commands a group of 375 fleets (Scenario: Classic Airlines). It is led by Amanda Miller, who led a leading utility provider of south eastern US, Jackson Energy, before joining Classic Airlines.

    This highly profitable organization was well aware of the challenges confronting the modern-day airline organizations. However, the constantly increasing uncertainty about flying made a significant impact on the stock prices of the organization, which decreased by 10% in the past (Scenario: Classic Airlines). Moreover, the negative perceptions in the market and media segments have affected the motivation-levels of the employees as well as the trust of the customers (Gupta, 2007).

    Constant increase in the fuel and labor prices has depreciated the organization's competitive ability. Even, the rapid expansion of the company decreased the number of customers, as the problems were overestimated. Subsequently, the company has decided to decrease the costs and hold on to the trust of the customers for resolving these problems (Ansoff, 1965). In order to gain higher returns, innovative methods like flier program need to be introduced.

    //Above, I have discussed about the Classic Airlines; it is a part of the airlines industry and is a very profitable company that runs over 2300 flights in about 240 cities. The first section of the paper, deals with the environmental scanning for Classic Airlines. The key issue that is being faced by the organization is its decreasing market value of shares. I am simply providing an overview of the environment, so that you can understand it. //

    Environment Scanning for Classic Airlines

    Airlines have to make sure that certain rules have been put into place in order to make airlines safer. Classic Airline has to rely on the political and environmental factors that affect the course of action the airlines should decide. The amount of economic activity in the economic environment is extremely important. Whilst assessing the economic environment in which different business operate. The government tries to terminate the level of economic activities to provide a positive and responsive environment for business.

    The main issue of decreasing share value could be seen as a short term effect, which would be eliminated rapidly. Competitors include British Airways, Northwest Airlines and Southwest Airlines, etc. All these are in the similar situation and following more or less similar strategies including providing low cost services for customer satisfaction. Hence, it would become essential to study the various challenges associated with the organization, in order to overcome them.

    //Above the description about the environment of the company and its analysis has been made to understand its impact on the functioning of the company. Moving to the next part of the instruction, a brief description of the situation under which issues and opportunities will be identified, is being focused upon. For example://

    Describe the Situation

    Issue and Opportunity Identification

    The number of passengers in business & leisure class is decreasing. Simultaneously, reduction of fares and ensuring higher customer satisfaction levels is becoming difficult for the organization. Its stock prices are highly affected by the lowering of the market value. The uncertainty about flight-schedules is decreasing the customer satisfaction-levels. Basically, the organization is failing to recognize its core strengths and unique features.

    Business class strictly prefers timely services and minimum time consuming flights. They demand frequent flights to various destinations and are prepared to bear a high price for quality services. In contrast, the leisure class prefers low cost flights owing to their cost-conscious nature. They form the maximum portion of the total customers of the organization but still do not demand frequent flights (Drucker, 1974).

    In the absence of a customer service program, the loyal customers are moving away from the organization. Thus, it has launched a Classic Rewards Frequent Flier program in which the miles earned by the members are redeemed to claim the benefits offered by the organization. But the membership in this program has decreased significantly from the previous year.


    ? The market share as well as the customers would increase through well framed loyalty programs.

    ? Clear explanation about the strengths and services offered by the organization would attract new customers.

    ? The CRM system could be improved by the use of technology.

    //The next part of the direction asks to provide information about the solution for the issues faced by the company and a finely designed 'customer satisfaction program' and 'reduction in costs' is the key solution for the problems. As per my research, I have tried to include some major points; but due to lack of resources, I am unable to include all of them. You are free to add more points, which you find suitable. //

    Solution for Classic Airlines

    A well designed customer satisfaction program and cost reduction in various operating functions could certainly address the various problems for the organization. In order to control the costs, reduction in the commission of the travel agents and fuel hedging would be crucial steps. Classic Rewards Program would provide various benefits to the travel agents. The employees would be motivated by developing a positive culture and providing them a share in the overall profits.

    / /I am sure whatever research I have provided; must have cleared the situation up to a good extent. The next section discusses the ethical dilemmas and the outlook of the stakeholders involved. The solution suggested, should take care of the ethical dilemmas and should address the concerns of the stakeholders as well. Various ethical dilemmas arise in an organization and they have to be handled very carefully. So, the resolutions provided are such that would help resolving the ethical dilemmas.//

    Stakeholder Perspectives/Ethical Dilemmas

    The solution identified by me would surely resolve the ethical dilemmas. The reduction in costs and increasing the customer satisfaction levels through customer loyalty programs would be the ideal solutions. Simultaneously, the incentives for travel agents would be increased and the employees would be motivated for achieving the targets by developing a congenial environment.

    The conflict between intermediaries and the management would be addressed by providing further incentives and benefits to them. The Classic Rewards Program would allow the travel agents to earn miles for availing additional benefits. By realizing the importance of customer satisfaction in increasing the firm's value, another ethical dilemma would be resolved, as these customers form the organization's relationship capital. Classic Airlines would deliver safe & timely journey at reasonable prices, provide high customer satisfaction and concentrate on the efficiency of the services.

    In order to deliver customer satisfaction, Classic Airlines would develop an effective E-Commerce service for providing convenience and flexibility in booking services and winning new customers. The profit margins would also increase by cutting down the intermediaries in the booking process. Focus on customer satisfaction and differentiation from other organizations would constitute a major part of Classic's marketing strategy.

    It would ensure safe, efficient and low fare air traveling accompanied with excellent customer services. Alternatively, further ...

    Solution Summary

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