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American Airlines Basic Economy Essay

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As equally as important, we cannot forget the latest implementation that American Airlines successfully launched, their Basic Economy and Premium Economy cabin. Back in February, Basic Economy was rolled out to 10 markets. AAL was not alone on this launch; United Airlines also launched their basic economy to compete with ultra low- cost carriers like Spirit Airlines. Basic Economy has lower fares; restrictions of using overhead bins and travelers are expected to board the plane last. Since then, the product has been expanded into 78 markets in the U.S. and Canada. The Premium Economy cabin has more perks than the Basic Economy, which is due to the price that customers are paying. Customers are paying for more legroom, wider seats, pillows, free food, wine and the luxury of using their flagship dining lounges. Currently, American Airlines Premium Economy cabin has an average upsell rate of more than…show more content…
Their actions of investments are leading them to a successful future. I recommend shareholders to hold onto to their stock and for investors to consider American Airlines. Overall, American Airlines so far had a good year and are expecting better results in the fourth quarter as well in the future for the years to come. Similar to other stocks, unavoidable events will occur that will hurt the company’s stock price and earnings. American Airlines has many positive signs of a great investment such as good Return On Equity of 56.82%, their Return on Invested Capital is 10.61%, the stocks trade at a price to earnings ratio of 12.85, which makes them attractive, the Free Cash Flow Margin is 4.4%, the operating cash flows are healthy it is 2.1 times the net income, and overall the company has shown signs of growth in revenue using the compound annual growth rate of 10.6%. All in all, American Airlines will continue to strive and overdue itself than the other airlines. One negative event will not stop them from reaching their
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