Classic Airlines: The Situation
University of Phoenix
Classic Airlines: The Situation
Problem Solution: Classic Airlines
In order for Class Airlines to overcome its current conditions, the company must undergo a very structured problem solving process. The nine-step problem solving process is just the process that Classic Airlines need. The nine step process consists of the following:
• Step 1: Describe the Situation,
o Involves identifying key concepts, issues, and opportunities in order to determine the overall focus of the project (McNeese, 2004).
• Step 2: Measure the Problem,
o Requires that baseline data be collected on the present processes and that ...view middle of the document...
One must also remember to remain actively alert to the ways the improved process can be made better (McNeese, 2004).
• Step 9: Evaluate the Results,
o Conveys the expected outcome, how is the outcome measured, and aligned with Classic Airline's end-goals (McNeese, 2004). To ensure positive end results internal audits will monitor some processes to ensure effectiveness (McNeese, 2004).
Classic Airlines: The Situation in Detail
As the world's fifth largest airline, Classic Airlines (CA) has a fleet that consists of more than 375 jets that serve 240 cities, providing more than 2300 flights daily (University of Phoenix, 2010). With such a large fleet, CA is able to employ 32,000 employees (University of Phoenix, 2010). CA also earned $10 million on $8.7 billion in sales during the previous year and has continued to maintain profits in spite of the company’s current troubles (University of Phoenix, 2010). In the past year CA has seen a 10% decrease in share and has also witnessed a decrease in employee morale (University of Phoenix, 2010). CA customer confidence and rewards program are declining as well. Currently the rewards a program have experienced a 19% decrease and a 21% decrease in flights per remaining members (University of Phoenix, 2010). Other issues at hand are the rising fuel and labor costs, which have delayed CA’s ability to compete for frequent flier miles (University of Phoenix, 2010). The 911 aftermaths have also caused CA to face a restrictive cost structure unlike younger airline companies (University of Phoenix, 2010). In addition to the other issues that CA is currently undergoing, the company is facing a 15% cost reduction over the next 18 months (University of Phoenix, 2010).
CA has the ability to turn the current the company’s current problems into positive opportunities through carefully examining and analyzing the current situation. CA should set prioritized targets. Starting with the question: How do we stay in business? With this question in mind CA should focus on frequent business travelers who anticipate a higher level of personalized service. In catering to this type of customer in a personal manner CA will increase customer confidence, reduce negative press, and increase profitability. The positive aspect is that this tactic can be performed without incurring additional cost, which keeps CA on task in regard to cost reduction. If successful, CA will gain positive word-of-mouth advertisement from satisfied customers and CA will also gain loyalty from its new customers.
Another area for CA to consider is the Rewards Programs. CA should offer the more add more companies to the rewards programs. For example: Hilton Honors program includes more than the Hilton brand hotels. Hilton Honors members can use his or her membership for car rentals, cruises, amusement parks, shopping, and dining (Hilton Honors, 2010). By collaborating with other business entities to improve the customers' traveling...