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Autor: anton • November 10, 2010 • 636 Words (3 Pages) • 1,106 Views
American Airlines started with the combination of eighty-five small airlines, which was formed by the founder of Aviation, Sherman Fairchild. The airline was renamed once again in 1934, after the company experienced some difficulty with the suspension of airmail. The company was the first to introduce SABRE, a computerized ticket reservation system; also the first to initiate the frequent flier program. In 2001 and 2002 the company experienced major losses; some losses were caused by the terrorist attacks which cut demand down by twenty percent. The company also suffered because of an agreement that the government forfeited on forcing American Airlines to give up 224 slots at the London's Heathrow airport.
American Airlines suffered a major lost in 2001-2003, if the company continues to lose profit, the company will be finished promptly. The losses were the results of low price strategies enforced by competitors, government regulations, and the September 11th attack.
Despite their losses American Airlines still holds the number one spot in the United States of America. The company has also gained more control by narrowing losses. In 2003, the company reported that their share prices increased by $14.29 in an eleven month period. The company's loss cuts were accomplished by their ability to negotiate reduction in labor cost, laying off thousands of employees (major cut into the company's revenue), expand partnership and cutting unprofitable routes.
High ticket prices is a major weakness for the company; majority of their competitors focus on low ticket price strategies in order to stay competitive which is an improvement American Airlines lacks. With the big emerge on E-Commerce most consumers are shopping heavily online; however online consumers are not reacting to the service that American Airlines provides. The lack of online sales can be risky for a company since most consumers are becoming accustomed to purchasing and comparing rates online.
American Airline has the opportunity to be innovative. The company can come up with new strategies for marketing on the internet to increase online sales. The company could also form an alliance with their competitors, which I would recommend United Airlines their strongest competitor. Enhancing their awards programs could also be beneficial to the company. One way to improve the program is by offering an American Airline A-Advantage credit card