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American Airlines Essay

1075 words - 5 pages

American Airlines |
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Since 2003 American Airlines has struggled to survive economically, with the rise of other low cost airlines such as Jet Blue, Southwest. In 2011 the board of directors finally came to the conclusion that after almost 10 years of bleeding money that filing for Bankruptcy was the only option. During the reorganization and bankruptcy American’s priories were not put in the right place. They unveiled a new paint scheme for their aircraft instead of focusing on getting the merger with US-Airways completed. Moving forward with the merger Americans weakness is their top level management priorities, aging fleet and non-committed employees. If you company is losing ...view middle of the document...

However, their strategy of rebranding during tough times is one tried and true method of marketing that works. Companies looking for a boost in sales and are past their peak phase tend to rebrand; making people think that an upgraded look and feel to the product means a better one. There are quite a lot of physiological factors that are at work with the consumers and American Airlines is banking that they will work for them. During the rebranding process American airlines must eliminate any money wasting unnecessary programs they are still holding on too. One of the main culprits I see is the ticket selling process. “Legacy airlines -- including United (UAL), Delta (DAL) and American Airlines -- have similarly tried to break up their coach fliers by charging for additional services, but they've done it in a pretty clunky way. The way they are currently offering customers the ability to choose extra legroom, in-flight entertainment, meal service, and charging baggage surcharges simply comes across as tacking on extra fees.” (Shelley) The key to keeping business throughout recessions and downturns in the airline industry is concentrating on the coach passenger’s and repeat customers. Tracking peoples flying habits through online reward programs and adapting your airline to fit the data. “If airlines start to use some of the data they already have about what people actually want, we might be less ticked about getting where we need to go.” (Shelley) These are the challenges that face American airlines and its service marketers. Without this information being used correctly how will they ever change with the times and provide better service.
Below are two charts, provided by AirlineFinancials.com LLC (Robert), showing the average passenger fare and the operation expense per passenger over an eight year span. Because the operating cost and ticket prices are very close the revenue being made from 30% of passengers is just enough to pay for the fuel for a flight. This is why the airlines are trying to get as many extra fees as possible from their passengers. If the airlines can make a steady profit of $200 - $800 per flight, steady being the key word, then they would be happy with that. However you are not going to get...

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