Marketing Plan For American Airlines

Business Strategy – BAD 4013 – SUMMER 1999 Case Study Southwest Airlines I. Strategic Profile and Case Analysis Purpose The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. Twenty-seven years ago, Rolling King, owner of floundering commuter airline, and Herb Kelleher, King’s lawyer, got together and decided to start a different kind of airline that would provide a short-haul, low-fair, high-frequency, point-to-point service in the United States. The company began service on June 18, 1971 with flights between Dallas, Houston, and San Antonio (“The Golden Triangle” as Herb called it). Southwest Airlines is the fourth

Currently, Southwest Airlines Company achieved the higher net income in 2013 and widened its field of operations by the integration with AirTran Airways. It seems Southwest’s business is going pretty well. However, there are numerous problems from competitors who will cause negative effect on Southwest’ market leader position and market shares. This marketing plan will make a careful analysis of the current activities of Southwest Airlines Company, and then this marketing plan will create how the company develop Southwest’s market leadership and higher market shares within 5years.

With operating income of $801 million and revenue of $8.55 billion, American Airlines was the largest airline in United States as of 1988. As Airline Deregulation Act changed the environment of airline competition, American Airlines had to make some radical changes in its business. Because deregulation made the market more competitive than ever, American Airlines still has many strategical and tactical decisions to make in order to be one step ahead of its competitors. Although there are many issues that airline companies deal with in order to create competitive advantage such as costs, route structuring, distribution channels, customer service and marketing activities like loyalty programs, the most important decisions are to be made regarding revenue management activities.

In the past three years the airline industry has faced an unparalleled list of challenges and American Airlines has certainly had more than the others. Year by year AA has tried to recover with a great deal of effort to turn the company around. The strategies they are applying to counteract the status are : Lower costs to compete, give to the customers the service they are expecting

Another weakness is the financial position of the airline which can be attributed to the weak economy and the rise in fuel prices. AA lost $359 million in revenue in the third quarter of 2009 according to their filing with the SEC (Stewart, 2009). Less people are travelling in these times which may be

Good hubs, loyalty programs, strong brand image, the largest airline fleet, good maintenance and infrastructure standard, are just to name a few. The regions dominant U.S. carrier came along with the company’s innovative mind to buy routes that encourages spreading hubs in the most tourist attracted places. As hubs increase rewards become broader redeeming meaningful awards as you fly across the globe with American. American Airlines AAdvantage program awards miles and Elite Qualifying Dollars for every airline affiliated with the oneworld alliance. The many relationships with numerous car rental companies, hotel brands and cruise lines is what set them above the rest. Along with captivating that title they spread their brand image strongly from terminal kiosks, interior seats and logo to website along with the plane’s finish. The company recently redesigned their logo taking a turn from an American image moving towards the American spirit. The reason behind the change was being a global flight servicer the old logo based on just American but also still portraying America without becoming blindly patriotic. There’s over 959 planes in service and 247 on back order bringing the company to the largest operator of aircraft in the world. It operates the A321 aircraft which is the largest fleet but not being limited they operate the A319 fleet, Boeing 737 Next Generation, and much more. Furthermore, increasing the amount of passengers carried increasing the amount of revenue created for the company’s

As a result, American Airlines chose to spend billions of dollars on new airplanes that

According to Fortune 500 (2015), Delta airlines is the largest airline in the world today and is able to fly to 567 worldwide destinations in over 100 countries. Delta airlines owns and operates its own reservations system and data and they give the employees stock in the company with profit sharing and stock ownership. One weakness of Delta airlines is the relying on it 's much older refurbished airplanes. Since oil prices are low they are able to save on costs but that could change if they oil prices increase again. US Airways has merged with American Airlines and the two have since become the world 's largest airline but both have since faced losses since the 2008-2009 economic crisis. US Airways has also had poor customer service

The official website of the airlines states, “The new American has the breadth and capabilities to compete more effectively and profitably than ever in the global marketplace.” The merger has made them grow and it has also enhanced their shareholder value through a wider system. They have strategically enabled faster connections and a blend of modern aircraft that is capable of attracting more customers. “In 2014, we reported record quarterly and annual profits. We were also able to deliver on our goal of generating returns for our investors by repurchasing $1 billion in shares and paying a quarterly cash dividend—the first since 1980. The early successes of our merger earned us Airfinance Journal’s Overall Deal of the Year.” (Anonymous, n.d.). In 2014, the Airlines saw financial gains like never before after they went bankrupt. They recorded “revenues of $42.7 billion, recorded operating profit of $4.2 billion; net income of $2.9 billion, had $1 billion share repurchase program completed, $ billion share purchase program authorized (announced January 2015), significant stock price appreciation, first dividend since 1980.” (Anonymous,

The report finds that Delta Airlines has successfully emerged from its bankruptcy in 2005 to report successful returns in both 2007 and 2008. With its 2008 acquisition of Northwest Airlines Delta became the world's largest airline, further improving its position in the airline industry. Despite this current positive position report also finds potential adversities

Over the past year, stock prices for both American Airlines and Southwest Airlines have jumped over 100%. According to Marketwatch (2014), American Airline’s stock

In March 2012, American Airlines was looking for a merger with another airline under Chapter 11 Bankruptcy Protection. American Airline’s CEO Tom Horton announced that the airline was ready and open to merge. Meanwhile, the parent of US Air Way, US Air Way Groups had showed the interest in taking over the parent company of American Airlines, AMR Corporation since January. US Air Way expressed that the merger would be a great opportunity for American Airline to merge and save over 1.5 billions per year in added to revenue and reducing cost. American Airlines ‘s stakeholders and shareholders supported this merge between two airlines.

US Airways completed a merger in December 2013 . This merger provided much needed cash infusion into American Airlines, enabling it to emergency from

American Airlines was the United States’ largest carrier in 1992 with a fleet of 622 jet aircraft, flying 2,450 flights daily to 182 locations, as well as new innovative technology and programs. American Airlines was the first to introduce a computerized airline reservation system called Sabre, “Super Saver” fares and frequent flier programs. Regardless of the innovations, American Airlines and the airline industry was still not operating as profitably or providing customer satisfaction the way it should have in 1992. In 1991, As a result of a recession and the Gulf War, demand for air travel fell, fare wars came about, and the airlines

According to the latest statistics given by the International Air Transport Association (IATA), the airline sector will post a profit of $9 billion in 2011. After the recent credit crunch, economies are now coming back to normal, business travel is increasing and investments in the airlines are now rising.