American Airlines Group: Company Strategy & Performance Analysis
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.
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.