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American Airlines - A detailed Paper

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Running Head: AMERICAN AIRLINES 1
American Airlines
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American Airlines
American Airlines History
The American Airlines Incorporation is among the leading airlines in the United States.
The owner of the American Airlines is the AMR Corporation with its headquarters located at Fort
Worth in Texas State. The development of the American Airlines Incorporation was through a
formation of the conglomerate of 82 small airlines. This was through an active bid f acquisitions
and reorganizations, majorly carried out in the 1930s. In fact, American Airlines was a common
brand used by most of the independent carriers such as the South Air Transport from Texas,
Colonial Air Transport from the Northeast, and Universal Aviation from the Midwest. This
airline operated a transcontinental air and rail route in 1929. These small conglomerate airlines
also included the Thompson Aeronautical Services, which operated a Cleveland – Detroit route
as from 1929, as well as the South Air Fast Express (SAFE), which operated in the Western
United States (Miles, 2008).

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AMERICAN AIRLINES 2
The American Airlines acquired an American Export Airline after the Second World War
and renamed it as the American Overseas Airways destined to serve its destinations in Europe.
However, the company sold AOA to Pan Am in 1950. The American Airlines once again
launched a second subsidiary named Líneas Aéreas Americanas de Mexico S.A. This new branch
was to fly through Mexico as well as create a number of airports. During the early years, and to
promote its brand, the American Airlines provided free usage as well as advertising on its
aircraft, especially for the “Three Guys Named Mike” film of 1951. The American Airlines was
the largest airline in America until when Capital merged into the United in 1961. This meant that
the American airlines were still the second largest airline in the world alter Aeroflot. The airline
continued its expansion over the years, with August 1940 seeing the airline increasing its
scheduled flights to 44 airports, 66 airports in august 1953, and 68 airports in November 1978
(Rolow, 2009).
Economic Status
The American Airlines is currently financially stable, and the best proof of this is their
planned merger with the US Airways. This is thanks to the products and services that the airline
provides to both its passengers and cargo travelling. The airline strives to ensure it meets all the
needs of its customer, both affluent, as well as, those from a low-income level do. The airline
operates a Flagship Suit service, which provides ambience, class and prestige to passengers using
this service. The services at these suites are first class as the airline ensures that customers get the
right value for their money. Other flight class categories that the airline operates include the
domestic first class, the business class, and the economy class. The services offered at these
different levels of flight categories varies in relation to the chosen level, with the economy class
being the most affordable class for most users (Szurovy, 2003).

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AMERICAN AIRLINES 3
This differentiation of flight classes enables the airline to serve a diverse majority of the
society depending on their economic capabilities. As such, the airline becomes a major leader in
the industry as all customers identify positively with it, basing on the travel fares and quality of
on-board services that they receive while using the airline. In addition, the flyer program
launched by the company assists in the development of a loyalty program in the world, whereby
passengers earn points for every time they use the airline’s services, which they can later redeem
free flights and other gifts (Miles, 2008).
Possible Merger with US Airways
The American Airlines announced a possible merger with the United States Airways in
February of 2013. A successful merger between these two major airlines would result into the
formation of the largest airline in the world, both in fleet capacity, as well as regional and
geographical coverage by their flights. The merger terms and conditions stipulated that the
shareholders of AMR would own 72% of the newly created the company while those of the
United States Airways would own the remaining percentage of shareholding, which was 28%.
The new combination of the airline formed would bear the name of American Airlines as well as
carry its brand. Furthermore, the new holding company that would list in the stock exchange for
trading would use the name American Airlines Group Incorporation (Rolow, 2009).
However, despite the major benefits that would arise through the culmination of this
merger, the planned move got some serious opposition from a civil suit filed by the District of
Columbia, six attorney generals as well as the United States justice department. These groups
filed a petition against the planned merger of the two largest airlines in the United States basing
on antitrust concerns. Nonetheless, this did not deter the two airlines from realizing their chief
goals, which was to form the largest airline in the world. In fact, the American Airlines vowed to
go ahead with the planned merger as well as fight against the law civil suit presented against

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