MBA 570, University of Phoenix: Classic Airlines Problem Solution

Essay by Trojan_ManUniversity, Master'sA-, December 2009

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Classic Airlines is the fifth largest airliner in the world and commands more than 375 jets. In 25 years of business, Classic Airlines has more than 2300 flights daily and serves 240 cities. Since the beginning, Classic Airlines has always been profitable, but since 2005 the Classic Rewards program has sharply declined by 19%. To make matters worst, consumer confidence appears to be vanishing and remaining Classic Rewards members on flights is also dropped by 21%. With all the decreases in flights, Classic's business has also taken a hit. With the decrease in business, Wall Street, the media and public perception of Classic Airlines financial security is in doubt. The reason for the doubt is Classic's Rewards program, flights and profits have decline since 2005 and loyal customers have lost faith in the firm. Classic Airlines must identify issues and opportunities to rebound to earlier times.

Describe the SituationIssue and Opportunity IdentificationIn order for Classic Airlines to rebound to earlier times, the firm will have to start understanding the needs of the customers.

Classic Airlines forgot that customer service is what made them the fifth largest airlines in the world. Classic Airlines has failed to keep the confidence of the consumer and by doing the numbers speak for themselves (Kerin-Hartley-Berkowitz-Rudelius, 2003, Page 6). Since 2005 Classic Rewards program dropped 19% and 21% decrease in flights per remaining members. Classic loyal customers were jumping ship and the ones still aboard seemed to be flying less frequently -- or at least less frequently. Renee SVP of customer service said, "That for the past two years Classic has lost touch with the customers." Renee said, "Everyday as the SVP of customer service I monitor calls from customers telling Classic want service elements are not in place." The CRM is used for nothing more...