Case Study : American Airlines, Inc.

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Karla Reigosa Dr. Jim Farah August 19, 2017 Case Study American Airlines, Inc. Founded in the 1930s, American Airlines (AA) is the world recognized airline company and is headquartered in Fort Worth, TX. Before 2013, AA ran under three carriers; American Airlines, American Eagle and American Connection, and with these three carriers they were in over 260 airports all over the world and operated in more than 50 countries and territories while maintaining an average of 3,500 flights a day. It 's difficult to think of this as a possibility that the largest airlines known in the United States had to file bankruptcy but a deeper look into how it lead to this should be able to clear and help us understand. In the first 25 years of AA 's…show more content…
AA proposed a solution but it required to push out the GDS. The current problem was that AA paid the GDS and the GDS would then pay the OTA (online travel agent). The proposal was to cut down on distribution costs charged by GDS 's and directly negotiate with the OTA 's through direct cost. In 2011, AA had to file a lawsuit against SABRE, Travelport, and Orbitz. Travelport and Orbitz were dismissed but SABRE continued through trial. Within the year, SABRE settled with an amount to AA and renewed contracts for multiple years. We 'd think that this would have helped AA but in 2011, they filed bankruptcy. On December 9, 2013, the American Airlines Group was formed. This was a merger between American Airlines and US Airways. This instantly doubled the flights a day and increased the number of airports which gave it an average of about 6,700 flights a day and a little over 300 locations along with adding 968 operated aircraft 's The merger aimed to yield $1.5 billion in terms of added revenue and costs savings a year. So why the merge? AA was in bankruptcy and under the Chapter 11 bankruptcy protection, this could really help them out. By doing this, AA would officially become the largest airlines in the world and with this, came to a few lawsuits to stop this as many lawyers argued that AA would become a monopoly. So far, American has been able to find a way to stay afloat and the merger was the best way to get out of the bankruptcy
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