Classic Airlines

Problem Solution: Classic Airlines

Classic Airlines is the world's fifth largest airline, which contains a fleet of 375 jets that serve 240 cities. In 25 years of the organization Classic Airlines has grown to 32,000 employees and 8.7 billion dollars in sales. Although Classic Airlines is profitable, it has seen a major drop in its stock price over the past year. In this problem solution issues and opportunities will be uncovered to correct the root cause of the stock price problem. Beginning with the issues Classic Airlines will need to address is a 19 percent decrease in Classic Reward members, rising fuel and labor cost, 15 percent cost reduction plan, and declining stock price. These issues have created opportunities for Classic Airlines to address the root cause of the problem. This paper will discuss the situation, stakeholder perspectives/ethical dilemmas and the end-state vision for classic airlines.

Describe the Situation

Issue and Opportunity Identification

Classic Airlines' main issue is its 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 and labor cost, 15 percent cost reduction over the next 18 months. Classic Airlines does have a challenge to turn these issues into positive opportunities. Classic Airlines has created a Classic Reward team that includes Chief Marketing Officer Kevin Boyle, VP Customer Service Renee Epson, and Senior VP human Resources John Hartman have been challenged to redesign the rewards program without lowering the price or incurring more cost.

The Classic Reward team came to a conscience that customer service is the main issue at Classic Airlines. Classic Airlines did implement a CRM system, but the Classic Reward team found that the system is not being used properly and Classic Airlines continues not to listen to what the customer wants in their airline. This customer service discovery is especially challenging considering that the Chief Executive Officer Amanda Miller and the Chief Financial Officer Catherine Simpson have had this issue brought to their attention, but the they seem to be only concerned with the hard numbers.

The challenges discovered by Classic Airlines lead to opportunities to address the issues.

The opportunities for Classic Airlines are to raise the stock price, increase priority for customer service, combat increase in fuel and labor cost with increased profits, and decrease the cost expectation for Classic Airlines. Classic Airlines has the opportunity to change their strategy from a price battle with other airlines to a customer service driven airline which price is not always the most important offer to a frequent traveler.

Classic Airlines can began to realign itself as a customer service driven airline with the opportunity to create an alliance with other airlines with the assistance of Josef Wymann, a previous coworker of Kevin Boyle. The Classic Reward team will have difficulty in selling Amanda Miller and Catherine Simpson, but it is a step in the right direction