Classic Airlines

Classic Airlines, the world’s fifth largest airline, has been in business for 25 years and employs over 32,000 people. Classic Airlines has a fleet of 375 jets, serving 240 cities and operating over 2,300 flights per day. An inevitable decline in sales, market share, profitability and membership in the rewards program, resulting from attacks on 9/11 and the rise of fuel cost, has the airline facing a restrictive climate in the industry. Based upon the declining sales and the latest customer loyalty report, the Board of Directors recently mandated a 15% across-the-board cost reduction over the next 18 months. In addition, CEO, Amanda Miller has delegated members of the leadership team with making improvements to the frequent flier program. Classic Airlines desires to boost
consumer and employee confidence by keeping prices low while increasing customer satisfaction in the company.

Public Relations and Marketing Issues

Classic Airlines has several factors influencing their marketing activities which some are largely uncontrolled. The company is faced with rising fuel and labor costs. These large increases have forced cost-cutting through high passenger load ratios and better efficiency, however, these costs remain an obstacle to high profitability. Furthermore, the airline industry is still recovering from the effects of 9/11 and after over-expansion following the downturn. Consumers have also shown their willingness to travel on lower budgets and discard their loyalty to Classic Airlines.

Classic Airlines is facing declining consumer confidence in the airlines with a 19% decrease in rewards members and of those members there has been a 21% decrease in activity. Corporate culture maybe a factor, some members of the executive team appear to be more concerned with financial numbers rather than customer service. Classic Airlines needs to maximize customer satisfaction and increase brand loyalty to regain customer and investor confidence. It is clear from...