Case Study

Royal Blue the national passenger carrier for commercial flight, appointed a new advertising company, Amadeus. Amadeus was hired to spearhead a more customer oriented campaign, after Royal Blue was highly criticised for its hedging advert in 2009 that featured the slogan ‘Hedging for the future'.

Royal Blue spent Rs 100 millions for that campaign which showed millionaire businessman Ralph Lorenzo sipping a scotch in the first class and watching other airlines grounded because of the lack of fuel.

The advert got good pre-publicity but turned out to be a communication disaster when it coincided with the news that Royal Blue was laying off 200 employees for economic reasons.

The earlier advert provoked a national debate and even politicians from either side of the House criticized the advert saying the Royal Blue's customers should revolt.

Royal Blue's image crisis worsened when it was revealed that the new Chief Executive who spent only three months in office was paid a compensation of Rs 30millions when he left. Competitor Red Wing had been running adverts that triumph the fact that it is reducing its air fares by 10 %. Furthermore Royal Blue published its annual report showing a deficit of Rs 1.5 billions.

To make matters worse Royal Blue announced that it is cutting cost on food and drinks served on regional flights.

Questions

(a) What were the exact causes and events that led to this communication crisis for Royal Blue? Sustain your answer by referring to examples in the case study.

(b) Classify the stakeholders in the case study as equity, economic/ market and influencer stakeholders. Justify your classification.

(c) List down your recommendations to repair the damage caused to the reputation of Royal blue.