SUBMITTED BY,

ADITHYA JAYARAJ

AKSHAY.R

ALINE MARIA
ABRAHAM

AIRLINE INDUSTRY A1 & C1

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 AMERICAN AIRLINES

The world's largest airline when measured by fleet size, scheduled passengers carried,
and revenue passenger mile- American, together with its regional partners, operates an
extensive international and domestic network with almost 6,800 flights per day to
nearly 350 destinations in more than 50 countries. American Airlines is a founding
member of the Oneworld alliance, the third-largest airline alliance in the world.
Regional service is operated by independent and subsidiary carriers under the brand
name American Eagle. The airline handles more than 200 million passengers annually
with an average of more than 500,000 passengers daily.

As of February 2021, American Airlines operates the largest commercial fleet in the
world, comprising 881 aircraft from both Boeing and Airbus. Over 80% of American's
aircraft are narrow-bodies, mainly Airbus A320 series and the Boeing 737-800. It is
the largest A320 series aircraft operator in the world, as well as the largest operator of
the A319 and A321 variants. It is the fourth-largest operator of 737 family aircraft and
second-largest operator of the 737-800 variant. American's wide-body aircraft are

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Boeing airliners. It is the third-largest operator of the Boeing 787 series and the sixth-
largest operator of the Boeing 777 series.

American Airlines exclusively ordered Boeing aircraft throughout the 2000s. This
strategy shifted on July 20, 2011, when American announced the largest combined
aircraft order in history for 460 narrow-body jets including 260 aircraft from the
Airbus A320 series. Additional Airbus aircraft joined the fleet in 2013 upon merger
with US Airways, which operated Airbus aircraft almost exclusively.

VISION
American Airlines' vision statement is “To be a world's most reliable, affordable,
and profitable airline.” While this is not the official vision statement of the
company, the management strategic objectives of the company that targets to serve all
customers and grow the firm into a global enterprise alludes to such a vision
statement. The statement relates to the following key components.

 Global presence
 Reliable
 Affordable
 Profitable airline

It has succeeded in establishing a foundation steered by research, innovation, and a

dedicated human resource management system that understands the aviation industry.

MISSION
American Airlines’ mission statement is “Committed to provide every citizen of the
world with the best service of the air travel to the extensive selection of
destination possible.” The statement represents the strategic objectives of the
American Airlines business and its prioritization of the customers as the primary users
of its services. It also shows that the management recognizes the competition out there
by mentioning its expansion motives as a strategic marketing tactic for securing its

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influential position in the aviation market. The mission statement has the following
primary components:

1. Distinguished services
2. Improving lives
3. Exceeding expectations

In the first component of this mission statement, American Airline focus is on the
services the company provides its customers. The aviation market in the U.S. and
beyond as become a very competitive niche, with major airlines doing the best they
can to secure themselves a sizeable piece of the market. American Airlines has not
been left behind in this craze.

The company does everything within its potential to differentiate its packages and
services in a way that all customers across the world feel appreciated and that they
belong with American Airlines. The efforts of the company to meet this component
relates to the second one as well. American Airlines continues to prove that it is a
customer-oriented company, a people airline that puts the customer first above all
other interest.

GOALS
American Airlines Group, Inc. focus on improving operations, growing efficiently and
profitably, and generating more free cash flow.

HISTORY
On April 15, 1926, Charles Lindbergh made a humble flight that would change
aviation forever. A simple mail route carried Lindbergh across America back and
forth again and sparked the beginning of the world’s largest airline. With the help of
Donald Douglas and American founder C.R. Smith, the first DC-3 plane was created
which changed the mail route to a passenger-driven route. Throughout the years,
American has acquired over eighty small airlines, moved its headquarters to Fort
Worth, Texas, received numerous accolades, expanded its fleet to over 900 aircrafts,

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opened operations in 10 major hubs around the U.S., and has grown to fly to 350
destinations across the globe.

1936: American is the first to fly the DC-3 commercial flight from New York to
Chicago.

1939: US Airways (later American Airlines) is founded in Pittsburgh, Pennsylvania.

1957: American opens the world’s first facility for flight training in Dallas/Ft. Worth.

1981: American introduces AAdvantage, the first of the airline loyalty programs.

1991: American celebrates its one billionth customer.

2001: American loses 23 people in the tragic events of 9/11.

2015: American and US Airways merge as one airline.

PRODUCT PORTFOLIO
PRODUCTS & SERVICES

American Airlines together with its regional partner American Eagle, offers around
6,700 flights daily to 350 destinations in 50 countries (American Airlines, 2020). It
offers customers different options i.e. Flagship First, Flagship Business, First,
Business, Premium Economy, Main Cabin Extra, Main Cabin, and Basic Economy.
These services offer different privileges e.g. Flagship First provides speedy private
check-in at select airports. It also offers an exclusive fine dining experience.

However, if customers want lower prices, then the best option for them is Basic
Economy which offers a comfortable seat in the Main Cabin, free snacks, soft drinks
and inflight entertainment.

PRICES AND PRICING STRATEGIES

American Airlines offers different pricing options for its customers. those who can
afford can go for premium services such as Flagship First or Premium Economy and
pay more, while those who have financial limitations can opt for Basic Economy. This

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differentiated pricing strategy helps the airline cater for the needs of different market
segments. However, this price differentiation may sometimes be in conflict with the
positioning of the airline as a premium airline.

PLACE/ DISTRIBUTION CHANNELS

America Airlines currently flies to 350 destinations in 50 countries. It has world’s

largest commercial fleet. Customers can book tickets on its official website. Likewise,
they can use the websites of renowned tour operators e.g. Skyscanner and Expedia. As
a member of the Oneworld alliance, American Airlines has codeshare agreements with
a number of airlines which enables it to take its services to more customers and fly to
more destinations.

PROMOTIONAL STRATEGIES

American Airlines spend millions of dollars on advertising. McClellan (2015)

reported that the airline spent nearly $30 million on ads in 2014. When many airlines
are grounded and international flights are cancelled, American Airlines has come out
to launch a video ad campaign dubbed as ‘You Are Why We Fly’.

PROCESS IN AMERICAN AIRLINES

American Airlines has different business functions to deliver its services to its
customers, hence different processes. For instance, airport check-in is different for
different services. Flagship First and Flagship Business customers can experience the
airline’s private check-in which is very speedy and collect their checked bags first
when they land. However, this speedy process is not available to customers of other
services such as Basic Economy.

REGIONS OF OPERATION
American Airlines flies to 95 domestic destinations and 95 international destinations
in 55 countries in five continents.

American currently operates ten hubs.

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Charlotte – American's hub for the South eastern United States. Its operations in
Concourse E are the largest regional flight operation in the world. American has about
91% of the market share at CLT, making it the largest carrier at the airport.

Chicago–O'Hare – American's hub for the Midwest. American has about 35% of the
market share at O'Hare, making it the airport's second largest airline after United.

Dallas/Fort Worth – American's hub for the southern United States and largest hub
overall. American currently has about 84% of the market share at DFW, making it the
largest carrier at the airport. American's corporate headquarters are also in Fort Worth
near the airport. DFW serves as American's primary gateway to Mexico, and
secondary gateway to Latin America.

Los Angeles – American's hub for the West Coast and its transpacific gateway.
American has about 19% of the market share at LAX, making it the largest carrier at
the airport.

Miami – American's primary Latin American hub. American has about 68% of the
market share at Miami International, making it the largest airline at the airport.

New York–JFK – American's secondary transatlantic hub. American has about 12%
of the market share at JFK, making it the third largest carrier at the airport behind
Delta and JetBlue. JFK also serves as a major connecting point for other Oneworld
carriers.

New York–LaGuardia – American's second New York hub. The airport also serves
as a base for American Airlines Shuttle. American has about 27% of the market share
at LGA, and is the second-largest carrier behind Delta.

Philadelphia – American's primary transatlantic hub. American has about 70% of the
market share at PHL, making it the airport's largest airline.

Phoenix–Sky Harbour – American's western hub. Currently American has about

46% of the market share at PHX, making it the airport's largest airline.

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Washington–National – American's hub for the capital of the United States. The
airport also serves as a base for American Airlines Shuttle. American has about 49%
of the market share at DCA, making it the largest carrier at the airport.

DIRECT BRAND
Southwest Airlines- Southwest Airlines has been profitable for 37 years in a row,
carrying over 100 million passengers each year. It has created a business model that
offers few amenities, low operating expenses, and less expensive flight costs.
Southwest employs and encourages excellent customer service. All of this has added
to their increased repeat customers.

Delta Airlines-Delta Airlines is second only to American Airlines when it comes to

largest passenger airlines. Airlines such as JetBlue and Southwest, that offer cheaper
flights, have caused financial issues for Delta, who is trying to keep up. In 2005 Delta
went bankrupt, forcing it to implement a new strategy focusing on international, rather
than domestic, routes.

CORE COMPETENCIES AND COMPETITIVE ADVANTAGE

Competitive advantage can be defined as a position the company occupies against it

competitors. American Airlines employs cost leadership method to obtain sustainable
competitive cost advantages over other carriers. The company is well known for the
combination of low prices and high-quality services. As the company occupies a
leading position among US air carriers in providing air carriages in the country, it has
an opportunity to offer the prices that appear to be attractive to customers.

The company’s controllable costs include tools, the power used while manufacturing
and repairing airplanes, and costs for unique services provided by the company. In
fact, all costs can be regarded as controllable by certain managers in the company, and
the responsibility of controlling costs is delegated to different departments.

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The company strives to attain the same cost compatibility in international flights, but
recent problems connected with bankruptcy and the crisis inside the company forced it
to eliminate many unprofitable routes. However, the merge with US Airways Group
allows American Airlines to gain the competitive cost advantages it has lost during the
recent decade.

Besides, the company employs differentiation advantage method, as it continuously

invests in developing the unique modern services for customers. The wide range of
different loyalty programs for passengers helps American Airlines to deliver greater
services for the same price of its competitors.

Identifiably - first airline to provide -Frequent flyer, Discounts for loyal customer,
Discounts on advance purchase.

Superiority - SABRE technology electronic ticketing system.

Adaptability- coping with 9/11 crisis, flight safety regulation.

CONCLUSION
American Airlines remains to stay a major airline and on top of the competition. In
order to do so the organization needs to align to address a healthy all around
environment. This healthy all around environment will look at focusing on providing a
comfortable and positive atmosphere in the internal and external aspects of the
company. Aligning effective communication to show compassion and transparency
with the consumers and staff is important in maintaining a healthy loyal environment.
All objectives for the company should align to make sure there is health and strength,
as well as all opportunities are addressed. Financial objectives and action plans should
help guide the company in innovation for successful customer service. Effective
collaboration is the key for the organization to marry all aspects together, and breed
innovation and growth.

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