Classic Airlines

Classic Airlines- Week 4 Paper
Jonathan Doe

Classic Airlines- Week 4 Paper
Classic Airlines finds itself in a precarious situation.   The airline has a history of success and profitability, but as the economy suffers and the competitive market changes, the airline leadership realizes that changes need to be made to decrease costs, increase passenger numbers, and ensure that Classic Airlines can remain competitive and profitable as it moves into an uncertain future.  
For Classic Airline to ensure they make intelligent moves forward, it is imperative that they fully understand the situation they face and all of the options available to them.   Using a classic problem-solving model, the following information can be properly evaluated and analyzed by all those involved.   Each of the following nine steps will help clarify and guide the decisions and course of action needed at Classic Airlines.  
Step 1: Describe the situation.   Classic Airlines is the fifth largest airline in the world, employing 32,000 employees, operating 375 jets, and generating $8.7 billion in sales.   They are not a small regional airline, they are a world leader.   Nevertheless, they are not without their problems as an airline.   Their stock value has decreased by 10%, and they have had a 19% decrease in the number of Classic Rewards members (University of Phoenix, 2011).   Those numbers paint an uncertain future for Classic Airlines.   The airline needs to increase its market share and retain the new customers it obtains.
Step 2: Frame the problem.   Classic Airlines need more passengers.   Passengers are the main source of revenue for the airlines, and while other add-on fees can also generate revenue, in the absence of fliers the opportunity to collect the add-on fees simply does not exist.   Classic Airlines needs to compete within the industry not only to gain new passengers, but also to find a way to keep them coming back in the future.   The sagging frequent flier program is an...