The paper “ Crisis at Classic Airlines - Situation and Problem Definition, Risks Assessment, Alternatives, Evaluation, and Benchmarking" is a thoughtful example of a case study on marketing. Classic Airlines is one of the world’ s leading passenger carriers and has been in the competitive aviation industry for over 25 years. It has become an airline of repute with over 32,000 employees on the payroll and a fleet of more than 375 jets serving 240 cities worldwide. The aviation industry is faced with huge fixed costs and very high variable costs in the due course of its operations.
The aviation industry offers huge potential but the business is very sensitive to external influences and is mainly driven by the performance of other industries. Airliners are faced with derived demand which is mainly driven by some leading industries of any economy. A major segment of air travelers comprises of business class passengers traveling for business or individuals on board on leisure trips. Both segments are promising and a good value for money can retain these passengers. The dependence of airline business on other industries is a leading contributor to the uncertainty in accurately forecasting the travelers for the future.
Forecasting for airliners has been a phenomenon of major concern as their high investments are dependent on the reliable traffic projections by their forecasting experts. With the increasing economic pressures and the need to significantly reduce operational costs in various industries, airliners have been facing a sharp decrease in their customers. Alternate channels are being adopted in certain industries whereas the use of teleconferencing and videoconferencing has increased in other industries to meet the objectives. Analyzing a particular airliner requires understanding the dynamics of the aviation business and its implications in local environmental conditions.
Classic airlines have been through the crests and troughs of the business cycle and faced challenging positions. Stocks have been performing well over the years but recently the fluctuations have been on the rise mainly due to the uncertain flying pattern of the travelers and reduction on travel in general. The airline industry has been critically analyzed by the financial market and it has been under the microscope, subject to scrutiny from all sectors. Uncertainty of business revenues and the highlighted financial matters of the industry’ s performance has been a source of dissatisfaction for the workforce associated with the airline business.
Employee morale has been on the lowest side ever. Besides the crisis in the aviation industry in general, Classic Airlines has been faced with issues which have further threatened their survival in the business. Rising fuel costs and labor expenses have reduced Classic’ s ability to compete for valued frequent fliers. Classic Airlines has also been faced with the issues associated with the overly optimistic prediction of the industry’ s recovery from the downturn.
Having predicted a sharp recovery from the crisis, Classic expanded its setup and invested significantly in its infrastructure which has added further to the grievances they are currently facing. Unlike these big airlines, small airline setups and relatively new entrants in the trait are not faced with any major restrictive costs, providing them greater agility in their business and allowing them to sustain these downturns in a more efficient manner. Large setups also face inefficiencies over time and need to coup up with those issues in order to sustain their positions in the long run.