American Airlines Executive Summary

The article “U.S. Slaps Duties on Canadian Jet, Raising Trade Tensions,” written by Ana Swanson and published in The New York Times on September 26, 2017, describes how new duty fees will be charged on all new Bombardier CS100 airplanes imported into the United States. This conflict arose after Boeing (American airplane manufacturer) accused Bombardier (Canadian airplane manufacturer) of using subsidies to sell its jets at incredibly low prices in the American market. The United States Commerce Department confirmed that Bombardier’s CS100 aircraft had received subsidies that were worth 220 percent more than the value of the plane’s sales price. These subsidies, which were given by the Canadian government, allowed Bombardier to reduce prices on their aircraft. The profits that they

An executive summary is a short section of a document that summarizes a longer report in such a way that readers can rapidly become acquainted with a large body of material without having to read it all. It will usually contain a brief statement of what is covered in the major document, background information, concise analysis and main conclusions.

One of the most large scale United States Airlines since the late 1920s is the Delta Airlines Incorporation. The incorporation’s financial statements are more than $9 billion in operating income and over $40 billion in total revenue Its net income was US$ 926 million. It is also worthwhile to note that Delta Air Lines, Inc. was the most admired airline for the 5th time in the span of six years and was named Fortune's Top 50 Most Admired Companies. 2 – How Delta Airlines Compete With Other Airlines

in revenue passenger-kilometers flown with 277.6 billion. In 2015 their revenue was up $40.704 billion, operating income was up $9.520 billion, and net income of $926 million. Delta’s total assets were down in 2015 with $53.134 billion. Total equity was up with $10.85 billion. The results that we will be discussing will include the RPM, ASM, and Load Factor from May 2015 and May 2016. The results will show the year to date traffic results and the monthly traffic results change.

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

Since 2016, operating income decreased while net income increased. Operating income decreased from 4,116 to 3,760. Net income increased from 2,181 to 2,244. In 2016, total operating revenues increased from 19,820 to 20,425 which is most likely because of an increase in their research and development. As for operating expenses, jet fuel prices are a huge factor because of fluctuating costs. In 2016, operating expenses increased from 15,704 to 16,655.

After watching the CNBC special about American Airlines and a week inside their business I noticed several interesting things. Though it was dated few years ago many of the issues are still the same. They had several Revenue drivers; Cargo income, excess baggage fees, last minute departure fees, Postal cartage, and miscellaneous charges for meals, drinks, and accessories. These are not needed but sometimes are needed on certain longer flights. They provide an extra income that may just keep a transcontinental flight from losing money.

Allegiant Travel Company, parent company of Allegiant Air, is a low-cost airline carrierthat caters exclusively to the leisure traveler. There are currently 980 employees that manage the whole company (allegiantair.com). They are known for their innovative and sustainable business models based on keeping fares low and providing additional services for customers.

American Airlines is looking to expand its market to more wealthy consumers by offering an excusive line of aircraft consisting mostly of first class and business type seating. This new model will be labeled under the title “Elite” and would market routes to and from major city hubs during heavy business traveling hours. American Airlines will position this service as the, “Black Jet” since that would be the standout feature of the aircraft. American can take advantage of its existing market base along with its frequent fliers to sell the experience of a flight experience beyond maximizing passengers. The target motto would be a “flight redefined.” American Airlines Elite would target business, first class, and frequent flying travelers.

JetBlue Airways, the latest entrant in the airlines industry has gone through the initial stages (entrepreneurial and collectivity) of the organizational life cycle rapidly under the successful leadership of David Neelman. JetBlue Airways is currently in the formalization stage of the life cycle where in it needs to create procedures and control systems to effectively manage its growth. Also as it proceeds to grow further to reach the elaboration stage, JetBlue needs to continue to align itself with the environment in order to maintain its sustained growth.

In 2015, American Airlines (AA) posted a record profit of $7.6 billion, which also included special items. A large portion of this gain came from the forth Quarter, which netted a $3.3 billion profit. AA credits a large portion of their success in 2015 to the plummeting oil prices, which was warmly welcomed across the airline industry. Fuel, which is a third of AA’s operating cost, declined 40.8% in consolidated cost.

Being the largest airline in the world comes with some significant advantages, one of the most important is a physical presence in the locations that passengers want to travel. As part of the anti-trust settlement, American Airlines agreed to sell approximately 15% of their takeoff and landing slots in Washington D.C. and New York . Even with this sale of slots, American Airlines is still able to offer flights to over 250 destinations daily. Just by their sheer size, American Airlines should be capturing a significant share of the market.

American Airlines holds the largest airline by fleet size and revenue. The airline is the second largest by number of destinations. Its biggest competitors are Delta Airlines, United, and Southwest. The headquarters are stationed out of Fort Worth, Texas. Dallas/Fort Worth, New York, Chicago, Los Angeles, and Miami are the 5 hubs that AA hold. Their largest centers are Dallas/Fort Worth, New York, Chicago, and Los Angeles. With these 4 centers as the busiest cities on an average day they have 6,700 flights and fly around 530,794 passengers. American Airlines focuses on having the strongest network system to ensure customer satisfaction. Their networking system is one of the strongest in the world. In the second quarter of 2015 they had a net

Introduction American Airlines, Inc. (AA) is a major and the world’s largest U.S airline in terms scheduled passenger-kilometers flown, fleet size, scheduled passenger-kilometers flown, number of destinations served, number of destinations served and revenue. It’s headquarter is within the Dallas-Fort Worth metroplex in Fort Worth, Texas. American Airlines and its regional partners fly in wide-ranging domestic and international network with more than 6,700 flights per day. It also flies to more than 350 destinations and to more than 50 countries. American Airlines was established in 1930 through an amalgamation of more than eighty smaller airlines.

Therefore, to grow with the growing market and number of competitors, the mergers and acquisitions made over the years were necessary for the future of the company. With their most recent merger with US Airways in 2015, “The new American will have more than $38 billion in annual revenue, 1,500 aircraft, 6,500 daily flights and more than 100,000 employees, making it bigger than rivals United Airlines and Delta Air Lines” (Ahles). This recent acquisition is exactly what American has needed considering they have been falling behind Delta and United in profits essentially ever since the attacks on September 11, 2001, where two of their planes were used. The acquisition of US Airways also assists American in the majority of their other strengths as well. With a larger domestic network, analysts say American executives will be able to focus on their domestic hubs but also increase passenger traffic to international flights, thus making their already premiere domestic network even