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American Airlines (AA): US Operations

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market study
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AA was founded in 1930 as American Airways and is headed by Gerard Arpey. American operates an extensive domestic network, with scheduled flights throughout North America including Canada. American Airlines was listed at No.120 on the Fortune 500 list of companies in 2010 and is a founding member of the Oneworld airline alliance and also 67th on America's largest corporations. AA is the largest domestic airline in the US in terms of domestic passenger kms flown and revenues. American Airlines is a subsidiary of the AMR Corporation and is headquartered in Fort Worth, Texas near its largest hub at Dallas/Fort Worth International Airport. It maintains a fleet of 615 aircraft with 568 on order of which 63% are for domestic routes. It flies to 82 domestic destinations. In 2010, AA reported Total Revenues of $13.2 Billion from domestic operations.

On an average day, AA flies 1100 flights between its 82 domestic destinations. The average age of AA aircraft is 15 years. Domestic Revenues grew 20% from $11 Billion in 2009 to $13.2 Billion in 2010. Net income grew from a $1.47 billion in loss to $471 million in loss, a $1 billion improvement was seen due to economic betterment of the world. For the second quarter of 2011, net income fell from a loss of $11 million in 2010 to a loss of $286 million. American Airline industry accounts for 51% of global airline industry with revenues worth $305 Billion of which AA holds 15% market share. 60% of AA's revenues come from domestic and Canadian operations and it faces stiff competition from US Airways, United Airlines, South-West Airlines, Delta Airlines and Continental Airlines .the top 6 controlling 85% of US airline market.

On March 31, 2010, American announced an expansion of its New York City service, both at JFK and LaGuardia Airports, in addition to a partnership with JetBlue. AA's uses SABRE computer reservation system which is linked to 55000 travel agencies in 100 countries and provides schedules for 400 airlines and 50 rail carriers besides other important features. In 2010, AA carried 63 million domestic passengers and has a total of 120 million domestic passenger kms flown. On October 20, 2010, American announced new and upgraded domestic service from LAX Airport in Los Angeles. New routes include service to Houston, Phoenix and Salt Lake City.

Future trends of AA, has major focus on data warehousing for reducing storage space for data. Other major issues to be addressed are customer satisfaction, response to operational failures and last but not the least addressing unpredictability of flights.

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