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Classic Airlines And Marketing Essay

862 words - 3 pages

Classic Airlines is the fifth largest airline in the world with 25 years of experience and profitable revenue. Even though the industry is in a financial downfall, Classic Airlines is not immune to pressure. Competitive pressure and increased lower-fare travel have combined to cause passenger revenue in a long-term trend.The five environmental forces in businesses must monitor: social, economic, technological, competitive and regulatory. By identifying trends related to each of these forces businesses can develop and maintain successful marketing programs (Kerin, Hartley, Berkowitz & Rudelius, 2005). The airline industry has reached a low point since the September 11th attacks that has contributed to the airline economics in addition to the worldwide economic viability. Worldwide including The United States has been impacted by the market decrease and has the airline business striving to regain and improve profitability. In spite of financial issues the airline industry remains competitive and as shown in Exhibit A, Classic Airlines Financials negative numbers are starting to show more each month (Course Materials, 2009).Situation BackgroundBy an increased uncertainly about flying there has been a concerned investment community on the watch, the airline industry operates with a microscope watching over them.The consumers' confidence appears to be waving. Classic's declining rewards program measured a decrease in reference to the lower number of Classic reward member which, turns to the lower amount of flights. The loyal customer's that Classic Airlines has had are not been happy and they are going somewhere else. Rising costs, such as labor and fuel has limited Classic's ability to compete for a valued perk for the frequent flier.Classic is now facing a mandated cost reduction to take place over the next year and the Board of Directors has not released much information on the company's current state and this may be lending fuel to the rumors that classic may have to file bankruptcy if they are not able to control costs (University of Phoenix, 2009).Issue and OpportunityIn this scenario multiple issues face Classic Airlines and are part of the decisional reasons the company is planning on making. The first issue Classic Airlines faces is a reduction of customers flying by showing a decrease of 20% and losing their customers to competitors.In addition to the reduction in their customer base, the cut in flight prices over the past year has placed Classic right above acceptable margins. The company is facing a price war with other airlines, but have no ability to lower their prices any further.Classic seems to be facing a lack of trust in their image and brand. The company has realized a continuous drop in their stocks over the past year. Classic Airlines is also mandating a cost...

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