MARKETING RESEARCH CASE EXERCISE
VAUJET OR AIRTAN, WILL IT STILL FLY WITH AIRLINE TRAVELERS?

ValuJet Airlines, Inc., was a large regional airline that offered affordable, no-frills, limited-frequency, short-haul flights primarily in the eastern United States. Its no-frills philosophy allowed the airline to offer low fares and to attract travelers who would have otherwise used ground transportation. ValuJet Airlines was incorporated in July 1992 and became a wholly owned subsidiary of ValuJet Inc. in October 1995.

In May 1996, an accident involving a flight from Miami to Atlanta, in which there were no survivors, dramatically changed the operations of ValuJet. Before the accident, ValuJet offered service to 31 markets from its hub cities of Atlanta; Washington, D.C.; and Boston. On June 17,1996, an FAA consent order resulting from the fatal crash required the company to suspend operations. On September 26, 1996, ValuJet resumed service from Atlanta, operating with only 60 percent of its original personnel. The airline had been battling an overwhelmingly negative public perception due to negative media coverage following the crash. The company never regained its pre-accident flight numbers or profitability.

In an effort to escape negative perceptions, ValuJet changed its name to AirTran Airlines on September 24, 1997. ValuJet completed a merger with AirTran in November 1997. Although AirTran Airlines will remain under strict scrutiny by the Federal Aviation Administration, the public still remains apprehensive. Or do they?

1. Research the history of ValuJet immediately before and after the fatal crash in May 1996. Look specifically at profit, market share, and number of passengers. Prepare a brief summary of your findings.

2. Based on your research, prepare a marketing research plan for AirTran. In this plan, discuss the type of research study or studies that AirTran should consider in order to measure consumer perceptions of the company and the new name.