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American Airlines Group: Company Strategy & Performance Analysis

American Airlines Group: Company Strategy & Performance Analysis

Summary

American Airlines Group (AAG) was founded in 1930. It started as a mail cargo service provider and gradually became one of the leading airline service providers in the US. It also offers cargo and passenger transport services. The company has three subsidiaries, namely, Envoy Air, Piedmont Airlines, and PSA Airlines. The company has strategic relations with American Eagle. American Airlines Group and American Eagle operate together in the US, Canada, the Caribbean and in Mexico. American Airlines Group serves 350 destinations in more than 50 countries. The group also offers services which enable consumers to book hotels, cars and cruises, as well as flights.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading airline companies. The reports detail company operations in key geographies as well as comprehensive analysis of each company’s growth strategy and financial performance. Furthermore, the reports allow benchmarking company performance through the provision of key performance indicators including: number of seats available, number of seats sold, number of passenger kilometres available, number of revenue-generating passenger kilometres, load factor and revenue per passenger.

Key Highlights

American Airlines Group has integrated technology with its business processes to operate effectively

American Airlines Group has been integrating advanced technology into its business operations to operate efficiently. For example, the company started solely issuing electronic tickets for flights. Its technology-integrated operating system has enabled the company to track and update boarding details. AAG has tried to resolve critical service issues, such as long waiting times, delayed flight boarding and flight arrivals, and other internal and external problems. As a result, its completion factor improved to 98.9% in 2016. Other factors such as on-time arrivals, on-time departures and mishandled baggage were recorded at values of 82.9%, 67.8% and 3.8% in 2016. To improve its operations further, the company is considering moving its present information system onto a cloud based system.

Launching new services to generate considerable revenue

AAG has introduced basic economy class services, with plans to introduce a premium economy class service later in 2017 to meet the diverse demand of its customers. The basic economy class service offers the cheapest fares, but with a limit on facilities. The premium service will offer more room, amenities and better services. The company aims to generate US$1 billion of revenue from these services.

Focusing on strategic cost centres to increase its business revenue

The company aims to restructure its financial resources to improve its financial strength. This will enable the company to access its financial resources at very low cost. The company is focusing on making technological investments to improve its efficiency. AAG aims to offer better services, such as on-board Wi-Fi, to allow its customers to access mobile phones and other electronic devices while in flight.

Scope

  • Company Snapshot - details key indicators and rankings of American Airlines Group in terms of revenue, net income and operating income, number of seats available, number of seats sold, number of passenger Kilometres available, number of revenue-generating passenger kilometres, load factor, revenue per passenger in the company’s key markets.
  • Company SWOT Analysis - outlines American Airlines Group’s Strengths and Weaknesses, and weigh Opportunities and Threats facing the company.
  • Growth Strategies - understand American Airlines Group’s corporate goals and strategic initiatives and evaluate their outcomes.
  • Company Performance and Competitive Landscape - analyse the company’s performance by business segments such as operating revenue, mainline passengers and regional passengers.
  • Key Developments - showcase American Airlines Group’s significant recent corporate events, changes or initiatives.
  • ICT Spending Prediction - Understand how the company allocates its ICT budget across the core areas of enterprise ICT spend, namely hardware, software, IT services, communications and consulting.
Reasons to buy
  • How does American Airlines Group rank in terms of number of seats available, number of seats sold, number of passenger Kilometres available, number of revenue-generating passenger kilometres, load factor and revenue per passenger globally?
  • What are American Airlines Group’s main growth strategies and how successful has the company been at implementing them?
  • How has the company performed since 2014 in terms of its segments?
  • How has American Airlines Group performed in comparison to competitors such as SouthWest Airlines, Delta Airlines, United Continental Holdings, and Deutsche Lufthasana.
  • What are American Airlines Group’s strengths and weaknesses and what opportunities and threats does it face?


Company Snapshot
Company SWOT Analysis
Growth Strategies
Company Performance
Competitive Landscape
Deals
Key Developments
ICT Spending Predictions
Financial Summary
Appendix

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