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570 Classic Airlines Problem Solution Week 6

Problem Solution: Classic Airlines

University of Phoenix


Problem Solution: Classic Airlines

Classic will come out ahead and be able to maintain a conservative fuel price margin. Added CRM benefits would immediately be felt by the ability to interact with customers thought the phone channel and the Web channel simultaneously. With the implementation of these changes to Classic, Classic can reap the benefits that maintaining its position as the fifth largest airline company can provide.
Describe the Situation
Issue and Opportunity Identification
Classic Airlines is the world’s fifth largest airline. Its fleet consists of more than 375 jets serving 240 cities with more than 2300 daily flights. Classic has grown to an organization of 32,000 employees in its 25-year inception and last year earned $10 million on $8.7 billion in sales. Classic Airlines has sustained profits even though it has been plagued with numerous problems. Classic has seen a 10% decrease in share prices in the past year. Employee morale is at its lowest because of scrutiny from the investment community, negativity from Wall Street, the media, and the public. Customer confidence is also declining as well as Classic’s Rewards program, which measured a 19% decrease in the number of Classic Rewards members, and a 21% decrease in flights per remaining members. Rising fuel and labor cost have hindered Classic’s ability to compete for the valued frequent flier miles. The 911 aftermaths have caused Classic to face a restrictive cost structure unlike younger airline companies. And if that is not enough, Classic is facing a 15% across-the-board cost reduction over the next 18 months (Scenario: Classic Airlines, 2007). Albert Einstein once said that in the middle of difficulty lies opportunity. Some of the best opportunities often originate from problems. Classic Airlines has the ability to turn its problems into opportunities through carefully defining the situation so that the statement...