Problem Solution: 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 (University of Phoenix, 2002). A decline in sales, market share, profitability and membership in the rewards program has resulted in the airline facing a restrictive climate in the industry based on airline consolidation and extreme competition. Based upon the declining metrics and the latest customer loyalty report, Chief Executive Officer Amanda Miller has tasked members of the leadership team with making sweeping improvements to the frequent flier program. By using methods that will promote a measurable return on any investment while still meeting the cost reduction goal and without discounting fares, reaching the end-state vision is within reach. In addition, the Board of Directors recently mandated a 15% across-the-board cost reduction over the next 18 months. Classic Airlines desires to boost consumer and employee confidence by keeping costs down while increasing customer and employee satisfaction in the company. To accomplish this, Classic Airlines will need to analyze customer feedback to understand long-term forecasting and marketing objectives. The objective The objective
of this paper is to present Classic Airlines’ issues and opportunities, stakeholder perspectives, ethical dilemmas, definition of the problem, the end-state vision and propose the optimal solution.

Describe the Situation
Issue and Opportunity Identification
Classic Airlines has several diverse factors influencing their marketing activities which
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. The airline industry is still...