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Challenges Facing Classic Airlines

Essay by   •  October 4, 2011  •  Case Study  •  932 Words (4 Pages)  •  1,425 Views

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Challenges facing Classic Airlines

Classic airlines are the fifth largest airline, but face all the challenges an airline would face today. Classic's consumer base has been declining and even if they made some profit this year their stock price has been hit hard resulting in adverse investor and employee morale. Classic has lost about 19 percent of Classic Reward members and noticed that remaining loyal members are flying less frequently with classic. Classic airlines just like all other airlines has invested heavily in expansion after recovering from September 11, 2001 attacks and now is not able to compete with newer airlines with low cost structure. Classic airlines has implemented a 15 percent cost-cutting strategy across the board to avoid financial crisis which now does not allow any kind of further marketing expenditure to increase customer base.

The leadership team consisting of the Amanda Miller, CEO and Catherine Simpson, CFO has entrusted Kevin Boyle, Chief Marketing Officer (CMO) the task of turning around the classic rewards program. CMO has to accomplish this challenging task without increasing any further cost or decreasing the airfare. Another challenge the CMO faces is an under utilization of the CRM system and the CEO's reluctance to enter into any strategic alliance with other airlines.

Marketing Concepts

Kevin Boyle believes that success of CRM would be in providing a strong loyalty program based on the wants and needs of the customers. Kevin wants to

Challenges facing Classic Airlines

Classic airlines are the fifth largest airline, but face all the challenges an airline would face today. Classic's consumer base has been declining and even if they made some profit this year their stock price has been hit hard resulting in adverse investor and employee morale. Classic has lost about 19 percent of Classic Reward members and noticed that remaining loyal members are flying less frequently with classic. Classic airlines just like all other airlines has invested heavily in expansion after recovering from September 11, 2001 attacks and now is not able to compete with newer airlines with low cost structure. Classic airlines has implemented a 15 percent cost-cutting strategy across the board to avoid financial crisis which now does not allow any kind of further marketing expenditure to increase customer base.

The leadership team consisting of the Amanda Miller, CEO and Catherine Simpson, CFO has entrusted Kevin Boyle, Chief Marketing Officer (CMO) the task of turning around the classic rewards program. CMO has to accomplish this challenging task without increasing any further cost or decreasing the airfare. Another challenge the CMO faces is an under utilization of the CRM system and the CEO's reluctance to enter into any strategic alliance with other airlines.

Marketing Concepts

Kevin Boyle believes that success of CRM would be in providing a strong loyalty program based on the wants and needs of the customers. Kevin wants to

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