Classic Airlines is facing many monumental challenges. The key word is monumental as immediate future decisions will determine the fate of Classic Airlines in terms of surviving in the airline industry, filing for bankruptcy, or bought out by the competition. Classic Airlines is at a fork in the road.
As the airline industry shares the pain with rising costs, particularly in fuel and labor, Classic Airlines is struggling internally. They are bleeding in regard to customer retention, which is decreasing by approximately 20%. Classic has one of the highest labor costs per seat-mile as they pay top salaries to pilots and other employees, ...view middle of the document...
Luckily, Classic Airlines is showing some glimmers of hope with other department heads. Kevin Boyle, who is Chief Marketing Officer, believes that marketing is critical to the company’s ability to move forward profitably. Renee Epson, who is Senior Vice President of Customer Service, is described as, “As the top management’s view of customer service becomes more operations-based, Renee has frequently found herself battling for the customer.” John Hartman, Senior Vice President of Human Resources, believes frontline employees represent the organization’s face to the customer and are critical to customer service and marketing effectiveness. These three individuals sound like the bright, shiny stars of the company.
The second strategy that would be helpful to Classic Airlines to boost additional revenue is a marketing concept called strategic alliance. Strategic alliance allows a company to form an alliance with domestic or multinational companies that complement or leverage their capabilities and resources to obtain greater sales impact at less cost (Kotler and Keller, p. 57, 2006). In the case of Classic Airlines, it would be in their best interest to form an alliance with the top Latin American airline as Kevin and Josef are trying to negotiate. It looks like Classic Airlines is already engaging in this strategy with their...