Problem Solution: Classic Airlines

Problem Solution: Classic Airlines

Problem Solution: Classic Airlines
The paper will discuss the issues surrounding Classic Airlines as the company plans its transition from a self-performing company to a corporation that uses outsourcing and strategic allegiances business model. The paper will create a solution based on the Issues, Opportunities, Risks, Stakeholder Perspectives and the Ethical Dilemmas that surround the decision to transition from one type of business model to another type of business model.

Describe the Situation
Issue and Opportunity Identification
Over the past year, Classics price per share has dropped 10%, revenue is steadily declining and the level of customer satisfaction is declining due to poor service and customer unfriendly rewards program. In addition to that, operating costs, (fuel) has risen 25% over the past 18 months and the legacy union labor force costs continue to increase at a pace greater than CPI (Consumer Price Index).
Rumors of possible bankruptcy and the level of negativity from Wall Street being leaked to the media has affected employee morale and investors confidence levels in the company
Some of the major challenges that exist are as follows:
-Increased operating costs have curtailed Classics ability to aggressively compete with the larger fleets for valued customers using discounted fares.
-Internal strife between the CEO and the CFO and the Marketing Department Management team
-Employee morale has declined to the lowest levels since the company was founded
-For the past two years, Classic Airlines has lost touch with their customers, and they have suffered a 20 % loss in Classic Rewards
-Decreased levels of travel due to the attacks on 9-11, the level of reversal was over estimated by several carries in the business.
-Classic expanded their operations, over estimating the publics need for air travel
-Internal strife and conflict of interest between the CEO and the CFO and the Marketing Department Management team
-Market...