American Airlines Financial Ratio

1775 WordsNov 3, 20128 Pages
Summary of the Company American Airlines, Inc. (American) was founded in 1934 and is the principal subsidiary of AMR Corporation. American provides aircraft services to around 160 destinations around the world. American Airlines has connections to 3 regional carriers. Two carriers are owned by AMR (American Eagle and Executive Airlines). The third carrier is owned by a third party (Republic Airways Holdings) that has no connection to AMR. These regional carriers serve to connect feed from major hubs to smaller regional airports that do not have international service. The major hubs for American are Dallas/Fort Worth, Chicago O’Hare, New York City (JFK), Miami and Los Angeles. Recent Events In late 2009, American released a…show more content…
Being in the midst of a global recession, American’s financial condition has been substantially weakened. Significant losses are adding up due to a weak demand for air travel and lower investment asset returns. There is a challenge to maintain sufficient liquidity and reduce debts during the global recession. Other risk factors and risk that American faces include disasters, accidents, and terrorist attacks. Due to its weakened financial condition, if any of these other risk factors occurred, American faces a large possibility of collapsing and filing for bankruptcy. Financial Ratios Analysis |Tests of Profitability |Tests of Profitability | |Tests of profitability measure how profitable the |2008 | |company is. This is done through ratio analysis by |2009 | |comparing income to multiple activities |2010 | | | | | |Return on Equity
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