American Airlines since Deregulation

American Airlines since Deregulation

Introduction

American Airlines (AA) was formed as a result of the merging of a number of small airline companies in 1929. The company becomes a direct subsidiary of the Aviation Corporation (AVCO), which was an airplane manufacturing and servicing conglomerate. American Airlines has a history that spans over 80 years. During the period, AA faced a number of challenges that posed serious threats to its operability. This essay analyzes the strategies and policies adopted by American Airlines in order to create a sustainable competitive advantage.

Discussion

AA Industry

American Airlines is a major player in the airline industry in the United States. The company has a long history in the industry spanning over a course of more than 80 years. It is amongst the oldest airline carrier in the country. The airline is going through the recovery phase after the setbacks of the 9/11 attacks on the American soil. As a result of all the changes that have emerged from the consequences of the events that followed the 9/11 coupled with the economic slowdown American Airlines is facing severe financial distress.

American Airlines belongs to the Large Airline Companies, which include Delta, United, Northwest, Southwest and US Airways. These companies have operations that span a number of major states in the United States and operate from various locations form other continents including Europe. The following chart shows that American Airlines is losing revenue generated from each aircraft over the years.

Source: airlinefinancials.com

Strategic Group Map

Strategic group is a technique that is used by companies to understand their position in the respective sector. This group map is used by companies to identify the potential competitors, opportunities and future issues that might arise from the severing competition. Since, American Airlines competes in the Large Airline Companies Group; the comparison of the ...