Identification of the Main Issues/ Problems
After an economic downfall in the early 2000’s the American airline discussed in the case study suffered from a bad reputation from customers complaints about its poor services. It had to pursue a more challenging path of rebranding its image through changing its name, color schemes, and logos. Although the downfall of the company can be attributed to the economic crisis and poor customer reaction to its services, there are two major reasons why the company failed to survive the blow. First, the airline company was young and financially unstable and second, the American airline was the benchmark of quality in the aviation industry. Although the economic crisis affected the whole aviation industry, some American airline survived the blow but a company that was more successful and innovative failed. This scenario suggests poor management decisions on its priorities and long-term goals.
Problem Analysis
Issues such as terrorism, stiff competition, and unstable fuel prices always affect the performance of the aviation industry. In such an industry, financial stability, innovation, marketing, and survival strategies of the company dictate how an airline company performs in the end irrespective of the vicissitudes and the economic seasons. It is a challenging environment especially for small and new companies, which face higher costs of operation, a factor that seems to be the predicament of the American airline company discussed in the case study. The company invested many resources on expansion and innovation to the extent that it could not survive through the economic recession. Alternatively, the company could have balanced between growth and sustainability until it could acquire the stamina to expand. Eventually, it resulted to desperate measures that would ensure its survival. For example, it laid off thousands of employees, reduced flight offerings, and sold its airlines. These issues in return affected the quality of their service delivery.
The American airline was a mark of quality within the aviation industry. The company had molded its consumer market with the belief that their logo was a mark of prestige. Consequently, consumers took the American airline as a benchmark of quality and expected better quality services even during the economic crisis. However, when its services deteriorated, they were disappointed, went viral on the internet, and ranked it as the most hated airline company.
