Classic Airlines Problem S
Problem Solution: Classic Airlines
James D. Edmonds, III
University of Phoenix
MBA/570
March 19, 2007
Professor Kim Houseman
Problem Solution: Classic Airlines
The airline industry has reached a crossroads. The effects of the worldwide economic slump and the aftermath of September 11th attacks have severely impacted airline economics and viability. While the U.S. markets were most severely impacted, airlines worldwide are striving to both regain and improve profitability. In spite of that, the airline industry remains extremely competitive. Competitive pressures and increased lower-fare travel have combined to cause a long-term downward trend in passenger revenue. Classic Airlines, the world’s fifth largest airline, with 25 years of profitable industry experience, is not immune to this pressure.
Many have focused on operational improvements to reduce costs, but the customer cannot be ignored. “Environmental scanning is the process of acquiring information to allow marketers to identify and interpret trends. There are five environmental forces 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). Scanning the environment has proved that success in today’s business environment requires a standardized process supported by timely, accurate data and analytical insight into customer and market requirements. Operational efficiency has become the top priority across an industry struggling to maintain profitability. Although the development of more cost-effective operations is an essential short-term tactic for airlines to pursue, competitive advantage in the long term will be based in large part on solid, differentiated customer relationships.
The purpose of this paper is to summarize the ongoing challenges Classic Airlines faces in...