edf40wrjww2CF_PaperMaster:Desc
Running head: PROBLEM SOLUTION: CLASSIC AIRLINES
Problem Solution: Classic Airlines
MBA570
University of Phoenix
Problem Solution: Classic Airlines
Today, companies function in an international marketplace with fierce competition in every industry. Therefore, maintaining viability is essential and change is constant and non-relenting. For that reason, companies no longer have a choice and in order to survive they must change (Kinicki & Kreitner, 2004). Classic Airlines is embarking on a journey of change and in order to navigate the impending changes Classic Airlines will have to make difficult decisions to assure a competitive advantage. Classic Airlines has grown to an organization of 32,000 employees since starting operations. Last year the company recorded $10 million profit on $8.7 billion in sales. While the airline is profitable, the stock prices have decreased by 10% in the past year and employee morale has been at its lowest due to increase scrutiny on the airline industry from all sectors of the economy. (Classic Airlines, 2008) Classic Airline's customer loyalty is on the decline as evidenced by the 19% decrease in the number of Classic rewards members and 21% decrease in flights per remaining member. The company is also facing a restrictive cost restructure due to optimistic over expansion plans based on anticipated rebound of post 09/11 travel. Classic’s Board of Directors recently mandated a 15% across-the-board cost reduction over the next 18 months (Classic Airlines, 2008). Within the constraints of the mandate, Classic also needs to improve the frequent flier program with methods that will demonstrate a measurable return on any investment (ROI) ...