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 the transcripts of the customer service calls, that there is an obvious dissatisfaction with the reward program. Classic Airlines has a solid base to start from to rebuild public relations. The customer should be at the center of the business to help determine consumer likes and dislikes. The company already possesses an advanced Customer Relationship Management (CRM), however, the system has not been setup to maximize its potential use. Classic Airlines should integrate the system across the phone and web portals so they could extract more information from their customers to help improve the customer experience. Marketing concepts are crucial for Classic Airlines to consider when determining an appropriate strategy to circumvent the current circumstances. Of the various philosophies, Classic Airlines should contemplate the following concepts to improve their customer base: the value and satisfaction concept, the selling and marketing concept. The value and satisfaction: It is obvious that Classic Airlines’ current customer base is not happy with the services they are receiving. Many consumers are feeling betrayed, they have been loyal customers, and when it is time for them to reap the rewards; they were turned down bureaucratic reasons. They have reduced the face to face time with their customers and opted to replace workers with computers. Classic Airlines must go back to customer service and delivering value for its loyal users. The selling Concept: this concept states that an organization needs to actively sell its products, consumers will not usually buy enough of its products without persuasion. Classis Airlines needs to organize an aggressive promotional effort to get some visibility to its existing and new customers. The Marketing Concept: this concept represents the movement from product centered to customer based advertising. Philosophically, it is much different finding customers for your products, and finding products suitable for your customers. With an already a large market share, Classic Airlines should find ways to bring attractive offers to its already existing customers, and gain them back as life long satisfied customers.