American Airlines

American Airlines - The economic aspects

Introduction

American Airlines exhibits all of the characteristics of a firm in airlines industry where good tactical management is the key to success. This company and its regional airline partner American eagle serve almost 250 cities around the world and operate more than 3600 daily flights. Its goal is to provide safe, dependable and friendly air transportation along with related services. It is one of the airlines that have played an important part in the history of air transportation in the United States. The company has 69 years of History in the industry. As per American Airlines website, Starting as a mail company called "Aviation Airways", which carried bags of mail from Chicago to St Louis is how this company began to rise. In 1934 American airways became American Airlines, Inc. A few years later it became the nation's number one domestic air carrier in terms of revenue passenger miles.

Most aerospace executives believe investing for a greater expected return in the longer term is their preferred business strategy, even if it means accepting lower profits in the near future. According to most analysts, airline industry profitability is inversely related to capacity. Due to the decrease in capacity that airlines have had to implement, profits have been slowly getting better. Back in October of 2001 Don Carty, former CEO of American said that even before the attacks, the airline industry was in trouble. 

 Analysis

Wallace (2013) mentions in CNN news how American Airlines and US Airways are cleared to form a merger resulting in the world’s largest airlines. The airline industry is famous for its intense rivalry among competing players. Since the September 11 attacks, Southwest Airlines has been flying circles around the other major players in the industry. American Airlines is without question the largest in terms of size, but with a large debt to capital ratio they were more...