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Classic airline Essay Example

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Classic airline

Whilst it has been observed that competition is fierce in the airline industry, it has also been noted that a closer look at the profiles of the other competitors shows that to a certain extent, some of them have a competitive advantage over Classic Airlines. The major strengths of the three given competitors indicate that they are dominant players in the industry and they have a global presence and a strong existing network in different destinations they ply. It has also been noted that these players have successful loyalty programs in place which is currently a problem that is affecting Classic Airlines. Its customer loyalty base is waning and a holistic approach has to be taken in order to revive its diminishing fortunes. Another notable strength possessed by the competitors is that they have worldwide brand recognition and they are likely to appeal to a large number of customers.There are also internal factors contributing to Classic Airlines’ current crisis and these include labour costs. The firm is paying top salaries especially to pilots and other employees while other competitors are cutting back pay on such professions. Priority is given to the needs of the workers and this has increased the operating costs of the airline. High salaries offered to the employees are not commensurate with the actual economic state of affairs obtaining on the ground. The stance to give the employees the autonomy to decide destinations through a bidding system is also a contributory factor to the current crisis being faced by the airline. The high operating costs have limited the airline’s ability to compete for valued frequent flier given that it is now confined in a restrictive cost structure. Thus, as noted by Ben Sutcliffe, Classic’s General Counsel, the main problem related to this approach by the airline is that it has one of the highest labour costs which are likely to jeopardize its future. This has mandated a 15 % cost reduction across the board by the directors of the company. This particular measure is meant to revitalise the operations of the airline so that it can regain its lost glory.Basically, a company with high operating costs such as labour is likely to face some problems with regards to its viability in the long term. In as far as gaining a competitive advantage by the company is concerned, it has to be noted that certain

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preview essay on Classic airline
  • Pages: 9 (2250 words)
  • Document Type: Essay
  • Subject: Marketing
  • Level: Undergraduate
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