Problem Solution Classic Airlines

Introduction

Current situation

Classic Airlines are facing a difficult time financially due to a number of factors . The rising fuel prices and increased labor costs have reduced its profitability and contributed to forced cutbacks across the board . Customer loyalty has dipped and fewer passengers are flying with the airline . Consumer confidence has been adversely affected by the perceived mismanagement of the airline and this has contributed to a fall in stock prices leading to a further erosion of stakeholder interest in the traded stocks and airline as a whole . Preliminary

investigations seem to suggest that the airline is losing business to other players because it is unable to satisfy the consumer 's demands Budget airlines with their lean labor structure and `no frills ' on board appear to have captured the imagination of the existing flyers by addressing the issues that influence their decisions to fly

Classic airlines have to come up with new strategies to entice its former clients and attract fresh business if it is able to survive the harsh economic situations . Cutting fare prices is not a solution as further revisions downwards will only lead to price wars that will push the airline closer to bankruptcy . The top management is opposed to any price revisions as a previous attempt to push down fares resulted in negative competition . Marketing perspectives should focus on interventions that will address customer feedbacks and a system whereby such feedback can result in remedial action and customer satisfaction Their take on the situation is...