American Airlines

American Airlines

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American Airlines

American Airlines History

The American Airlines Incorporation is among the leading airlines in the United States. The owner of the American Airlines is the AMR Corporation with its headquarters located at Fort Worth in Texas State. The development of the American Airlines Incorporation was through a formation of the conglomerate of 82 small airlines. This was through an active bid f acquisitions and reorganizations, majorly carried out in the 1930s. In fact, American Airlines was a common brand used by most of the independent carriers such as the South Air Transport from Texas, Colonial Air Transport from the Northeast, and Universal Aviation from the Midwest. This airline operated a transcontinental air and rail route in 1929. These small conglomerate airlines also included the Thompson Aeronautical Services, which operated a Cleveland – Detroit route as from 1929, as well as the South Air Fast Express (SAFE), which operated in the Western United States (Miles, 2008).

The American Airlines acquired an American Export Airline after the Second World War and renamed it as the American Overseas Airways destined to serve its destinations in Europe. However, the company sold AOA to Pan Am in 1950. The American Airlines once again launched a second subsidiary named Líneas Aéreas Americanas de Mexico S.A. This new branch was to fly through Mexico as well as create a number of airports. During the early years, and to promote its brand, the American Airlines provided free usage as well as advertising on its aircraft, especially for the “Three Guys Named Mike” film of 1951. The American Airlines was the largest airline in America until when Capital merged into the United in 1961. This meant that the American airlines were still the second largest airline in the world alter Aeroflot. The airline continued its expansion over the years, with August 1940 seeing the airline increasing its scheduled flights to 44 airports, 66 airports in august 1953, and 68 airports in November 1978 (Rolow, 2009).Economic Status

The American Airlines is currently financially stable, and the best proof of this is their planned merger with the US Airways. This is thanks to the products and services that the airline provides to both its passengers and cargo travelling. The airline strives to ensure it meets all the needs of its customer, both affluent, as well as, those from a low-income level do. The airline operates a Flagship Suit service, which provides ambience, class and prestige to passengers using this service. The services at these suites are first class as the airline ensures that customers get the right value for their money. Other flight class categories that the airline operates include the domestic first class, the business class, and the economy class. The services offered at these different levels of flight categories varies in relation to the chosen level, with the economy class being the most affordable class for most users (Szurovy, 2003).

This differentiation of flight classes enables the airline to serve a diverse majority of the society depending on their economic capabilities. As such, the airline becomes a major leader in the industry as all customers identify positively with it, basing on the travel fares and quality of on-board services that they receive while using the airline. In addition, the flyer program launched by the company assists in the development of a loyalty program in the world, whereby passengers earn points for every time they use the airline’s services, which they can later redeem free flights and other gifts (Miles, 2008).Possible Merger with US Airways

The American Airlines announced a possible merger with the United States Airways in February of 2013. A successful merger between these two major airlines would result into the formation of the largest airline in the world, both in fleet capacity, as well as regional and geographical coverage by their flights. The merger terms and conditions stipulated that the shareholders of AMR would own 72% of the newly created the company while those of the United States Airways would own the remaining percentage of shareholding, which was 28%. The new combination of the airline formed would bear the name of American Airlines as well as carry its brand. Furthermore, the new holding company that would list in the stock exchange for trading would use the name American Airlines Group Incorporation (Rolow, 2009).

However, despite the major benefits that would arise through the culmination of this merger, the planned move got some serious opposition from a civil suit filed by the District of Columbia, six attorney generals as well as the United States justice department. These groups filed a petition against the planned merger of the two largest airlines in the United States basing on antitrust concerns. Nonetheless, this did not deter the two airlines from realizing their chief goals, which was to form the largest airline in the world. In fact, the American Airlines vowed to go ahead with the planned merger as well as fight against the law civil suit presented against their merger. This strong match ahead got a reprieve in November 12, 2013 when the two airlines reached a common consensus with the six state attorney general’s as well as the united states justice department to allow the merger to take place (Szurovy, 2003).Ticket Pricing

The ticket-pricing model used by the American Airline is so simple and systematic that it provides it users with convenience and satisfaction. A customer gets an opportunity to book a flight, alongside a hotel room, a rental car, a cruise, and other assortment of activities all at a single click owing to the great package offers from the airline’s website. Furthermore, the company adopts a low pricing range for its tickets in order to attract more passengers to travel with its flights. The airline offers its travelers the lowest airfares charges as well as provides a guarantee on their travel prices. In addition, passengers get to earn AAdvantage miles whenever they travel using the airline’s services (Miles, 2008).

Passengers save a lot of time when booking their flights with the American Airlines, or any of its partners, such as the American Connection and the American Eagle which through a combined effort serve to a maximum of two hundred and fifty destinations in fifty countries across the world. Passengers use a search by price schedule to check availability on a wide range of forty flights and their prices within their travel dates. In addition to convenience and variety while booking flights at the American Airline Corporation, the passengers also get the best packages in the pricing of their airfares. The airline guarantees the lowest airfares in the region, as well as zero charges for online booking of flights. In addition, passengers using the Airlines services get to earn AAdvantage frequent flyer miles using it major flights. The passengers can later redeem these flyer miles for gifts and bonuses, or use them to travel another flight at the airlines expense (Rolow, 2009).

Market Power

The American Airlines operates an extensive flight network, involving both domestic as well as international flights. The flights made by the airline’s schedule to fly through numerous corners of the globe, inclusive of Asia/Pacific, South America, the Caribbean, and North America. The largest hub of the American Airline is the international airport at Dallas/Fort Worth. As such, the American Airlines as well as the American Eagle, which is a regional carrier of the AMR group, account for 85% of the traffic at the airport, together with accounting also for 83% of the landing fees at the airport. The American Eagle and the American Airlines use this hub to travel to more destinations compared to the frequency they apply in using other hubs located across the United States (Szurovy, 2003).

The American Airlines serves four of the seven continents in the world, trailing behind the United Airlines and the Delta Airlines. Both of these airlines serve six continents. The company has a number of hubs that serve certain markets and destinations. For instance, the Miami and Fort Worth/Dallas hub serves as the Americas gateways, whereas the American Chicago hub graduated as the primary gateway used by the airline to Asia and Europe. On the other hand, the New York JFK airport is the primary gateway for the airlines Americas and Europe markets with the airlines Los Angeles hub (LAX) serving as the primary gateway to Asia. This shows that the airline has perfect control over its respective markets (Miles, 2008).

References

Miles, J. (2008). Dear American Airlines. New York: Houghton Mifflin Harcourt.

Rolow, A. (2009). The Plane Truth from an American Airlines Flight Attendant. Bloomington, IN: iUniverse.

Szurovy, G. (2003). Classic American Airlines. Hong Kong: Zenith Imprint.