American Airlines, Inc. is a major U.S. airline headquartered in Fort Worth, Texas. It operates an extensive international and domestic network, with scheduled flights throughout North America, the Caribbean, South America, Europe, and Asia.
he parent company of American Airlines, AMR Corporation, filed for Chapter 11 bankruptcy protection in November 2011, and in February 2013 announced plans to merge with US Airways Group, creating the largest airline in the world. AMR and US Airways Group completed the merger on December 9, 2013, with the new holding company American Airlines Group, Inc. being listed on NASDAQ that day, although the actual integration of the airlines under a single air operator's certificate will not be completed until a much later date. The combined airline will carry the American Airlines name and branding, and will maintain the existing US Airways hubs in Charlotte, Philadelphia, and Phoenix for a period of at least five years under the terms of a settlement with the US Department of Justice and several state attorneys-genera
Top 50 case-studies of airlines and airports excelling in social mediaSimpliFlying
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If you work in an airline or airport organisation and wish to download the slides, please email contact@simpliflying.com
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Since the birth of flight in 1903, air travel has emerged as a crucial means of transportation for people and products. The hundred-plus years following the invention of the first aircraft have brought about a revolution in the way people travel. The airline business is a major industry, relied upon by millions not only for transportation but also as a way of making a living.
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Read Case 10: Southwest Airlines. Answer questions 1-4 in a three to five page APA style paper, and supported with the concepts outlined in your text and from your previous classes.
1. Describe the current state of the airline industry and analyze what an airline can do to be successful in the current industry climate.
2. Perform a SWOT analysis for Southwest Airlines.
3. Assess the competitive position of Southwest Airlines by completing a competitor profile for Southwest airlines and at least two of its major competitors.
4. What alternatives does Southwest Airlines face to address the problem of declining financial performance?
Southwest Airlines 2008
1 In 2008, Southwest Airlines (Southwest), the once scrappy underdog in the U.S. airline industry, carried more domestic passengers than any other U.S. airline. The company, unlike all of its major competitors, had been consistently profitable for decades and had weathered recessions, energy crises, and the September 11 terrorist attacks. In the first quarter of 2008, the company was profitable and experienced record first quarter revenue and a record pas- senger load factor (percentage of available seats sold). However, the earnings release made it clear that the “threat of volatile and unprecedented jet fuel prices” was a major issue that threatened future growth. Operating expenses were rising, and Southwest announced that it would cut 2009 growth in available seats to less than 3%. Over the previous decade, growth had been about 5–10% a year. This cut in planned growth was consistent with previous responses to difficult environments. An insight into Southwest’s operating philosophy can be found in the company’s 2001 Annual Report:
Southwest was well poised, financially, to withstand the potentially devastating hammer blow of September 11. Why? Because for several decades our leadership philosophy has been: We manage in good times so that our Company and our People can be job secure and prosper through bad times. . . . Once again, after September 11, our philosophy of managing in good times so as to do well in bad times proved a marvelous prophylactic for our Employees and our Shareholders.
THE U.S. AIRLINE INDUSTRY
The U.S. commercial airline industry was permanently altered in October 1978 when Presi- dent Carter signed the Airline Deregulation Act. Before deregulation, the Civil Aeronautics Board regulated airline route entry and exit, passenger fares, mergers and acquisitions, aattract and retain the world’s top talent have combined to create a combination of path-dependent resources that are very difficult for even the wealthiest software and Internet companies worldwide to easily emulate, acquire, or accelerate. It will take years for any competitor to develop the expertise, infrastructure, reputation, and capabilities to compete effectively with Google. Coca-Cola’s brand name, Gerber Baby Food’s reputation for quality, and Steinway’s exper- tise in piano manufacture would ta ...
This presentation encompasses the classic case study of Southwest Airlines, USA.
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“This life is what you make it. No matter what, you're going to mess up sometimes, it's a universal truth. But the good part is you get to decide how you're going to mess it up. Girls will be your friends - they'll act like it anyway. But just remember, some come, some go. The ones that stay with you through everything - they're your true best friends. Don't let go of them. Also remember, sisters make the best friends in the world. As for lovers, well, they'll come and go too. And baby, I hate to say it, most of them - actually pretty much all of them are going to break your heart, but you can't give up because if you give up, you'll never find your soulmate. You'll never find that half who makes you whole and that goes for everything. Just because you fail once, doesn't mean you're gonna fail at everything. Keep trying, hold on, and always, always, always believe in yourself, because if you don't, then who will, sweetie? So keep your head high, keep your chin up, and most importantly, keep smiling, because life's a beautiful thing and there's so much to smile about.”
Prince William and Kate Middleton have been pronounced husband and wife at Westminister Abbey in London. The Duke and Duchess of Cambridge, as they will now be known, made their vows in front of 1,900 guests and the eyes of the world.
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Flanked by her sister and maid of honour, Pippa Middleton, who was wearing a long, cream silk gown, the bride was also accompanied by young bridesmaids Eliza Lopes, Grace van Cutsem, Louise Mountbatten-Windsor, and Margarita Armstrong-Jones, and pageboys Tom Pettifer and William Lowther-Pinkerton.
Prince William stood next to his brother, Prince Harry, and as his girlfriend of 10 years joined him at the altar the heir to the throne broke into a smile. Kate's mother, Carole Middleton, wearing a fitted blue-grey Catherine Walker outfit, looked on with pride.
The wedding ceremony passed without hitch, with the only moment of tension provided as Prince William struggled to put the ring, fashioned from Welsh gold given to Prince William by the Queen, on his bride's finger.
After the vows Rowan Williams, the archbishop of Canterbury, declared: "I pronounce that they be man and wife together, in the name of the father, and of the son, and of the Holy Ghost. Amen."
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The couple joined the Queen who is giving a lunchtime reception at Buckingham Palace for 650 guests, described by the palace as "a private gathering for guests drawn from the congregation who will represent the couple's official and private lives".
At just before 1.30pm William and Kate kissed for the first time in public on the balcony of Buckingham Palace. The fleeting embrace sent the already ecstatic crowds wild, and was repeated during a flypast.
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Mastering Multi-Touchpoint Content Strategy: Navigate Fragmented User JourneysSearch Engine Journal
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Understanding
AI-Generated Content:
AI-generated content includes text, images, videos, and audio produced by AI without direct human involvement. This technology leverages large datasets to create contextually relevant and coherent material, streamlining content production.
Key Benefits:
Content Creation: Rapidly generate high-quality content for blogs, articles, and social media.
Brainstorming: AI simulates conversations to inspire creative ideas.
Research Assistance: Efficiently summarize and research information.
Market Insights:
The content marketing industry is projected to grow to $17.6 billion by 2032, with AI-generated content expected to dominate over 55% of the market.
Case Study: CNET’s AI Content Controversy:
CNET’s use of AI for news articles led to public scrutiny due to factual inaccuracies, highlighting the need for transparency and human oversight.
Benefits Across Industries:
Marketing: Personalize content at scale and optimize engagement with predictive analytics.
Publishing: Automate content creation for faster publication cycles.
Education: Efficiently generate educational materials.
Healthcare: Create accurate content for patients and professionals.
Finance: Produce timely financial content for decision-making.
Challenges and Ethical Considerations:
Transparency: Disclose AI use to maintain trust.
Bias: Address potential AI biases with diverse datasets.
SEO: Ensure AI content meets SEO standards.
Quality: Maintain high standards to prevent misinformation.
Conclusion:
AI-generated content offers significant benefits in efficiency, personalization, and scalability. However, ethical considerations and quality assurance are crucial for responsible use. Explore the future of content creation with us and see how AI is transforming various industries.
Connect with Us:
Follow Cut-The-SaaS on LinkedIn, Instagram, YouTube, Twitter, and Medium. Visit cut-the-saas.com for more insights and resources.
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• Uncover the power of a foundational marketing system that dynamically communicates with prospects and customers on autopilot.
• Harness neuroscience and Tribal Alignment to transform your communication strategies, turning potential clients into fans and those fans into loyal customers.
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When done effectively, personalization builds trust, loyalty, and satisfaction among your users—key factors for business success. However, relying solely on AI capabilities isn’t enough. You need to anchor your approach in solid principles, understand your users’ context, and master the art of persuasion.
Join us as Sarjak Patel and Naitry Saggu from 3rd Eye Consulting unveil a transformative framework. This approach seamlessly integrates your unique context, consumer insights, and conversion goals, paving the way for unparalleled success in personalization.
For too many years marketing and sales have operated in silos...while in some forward thinking companies, the two organizations work together to drive new opportunity development and revenue. This session will explore the lessons learned in that beautiful dance that can occur when marketing and sales work together...to drive new opportunity development, account expansion and customer satisfaction.
No, this is not a conversation about MQLs and SQLs. Instead we will focus on a framework that allows the two organizations to drive company success together.
Short video marketing has sweeped the nation and is the fastest way to build an online brand on social media in 2024. In this session you will learn:- What is short video marketing- Which platforms work best for your business- Content strategies that are on brand for your business- How to sell organically without paying for ads.
Everyone knows the power of stories, but when asked to come up with them, we struggle. Either we second guess ourselves as to the story's relevance, or we just come up blank and can't think of any. Unlocking Everyday Narratives: The Power of Storytelling in Marketing will teach you how to recognize stories in the moment and to recall forgotten moments that your audience needs to hear.
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Understand Why Personal Stories Connect Better
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Core Web Vitals SEO Workshop - improve your performance [pdf]Peter Mead
Core Web Vitals to improve your website performance for better SEO results with CWV.
CWV Topics include:
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Come learn how YOU can Animate and Illuminate the World with Generative AI's Explosive Power. Come sit in the driver's seat and learn to harness this great technology.
2. Agenda
•
•
•
•
•
•
•
Company History - Brock
Market Structure – Meggan
Competitive Advantage – John
Game Theory/Pricing – Laurent
Industry Update & Conclusion – April
Quiz
Q&A
3. American Airlines Timeline
The Beginning: 1930’s-40’s
Formed from
conglomeration
of 82 airlines;
Aviation Corp
created
First to fly the
Douglas DC-3.
By year’s end
was the nation’s
#1 domestic air
carrier
Began
providing
catering with
SkyChefs
1929
1936
1942
1930
1939
Aviation Corp
subsidiaries
incorporated
into American
Airways, eventu
ally American
Airlines in 1934
Begins trading
on the NYSE
4. American Airlines Timeline
Building an Empire: 1940’s-50’s
Introduced
first domestic
US Freight
service
Merged with
Pan American
World
Airways
Built world’s
1st special
facility for
flight
attendant
training
1944
1950
1957
1945
1952
1958
America’s first
European Service
under the
AOA, transatlanti
c division under
merger with
American Export
Airlines
Introduced
the Magnetic
Reservisor,
seat tracker
1st U.S.
designed
turboprop
plane and
turbofan
engine
5. American Airlines Timeline
Industry Innovators: 1960’s
airline to offer
coast-to-coast jet
service with
introduction of the
Boeing 757
SABRE extends from
coast-to-coast and
from Canada to
Mexico, 2nd largest
real-time data
processing system
1959
1964
1st
1960
1967
Created SemiAutomatic Business
Research
Environment, better
known as SABRE
Massimo Vignelli
designs the famous
AA Logo.
6. American Airlines Timeline
Modernism & Regulation: 1970’s
Merged with
Trans Caribbean
Airways for 1st
Caribbean
routes
Began marketing
SABRE to U.S.
travel agencies
AA Flight 191
crashes at
O’Hare. 273
fatalities, deadli
est single
airliner accident
on US soil
1970
1975
1979
1974
1978
Introduced OneStop-Automated
Check-in and 1st
Boeing 747
Freighter
Airline deregulation takes
place as AA
launches major
route expansion
in US and
Caribbean
7. American Airlines Timeline
Progression: early 1980’s
First Airline to offer a
Frequent Flyer
program with
AADVANTAGE travel
awards
Stockholders
approved a new
holding company,
AMR Corporation,
the parent company
of AA
1980
1983
1982
1984
Established the Hub
& Spoke operation
with its first hub in
Dallas
Created the American
Eagle System, a
network of regional
airlines
8. American Airlines Timeline
Continued Expansion: late 1980’s
Acquired AirCal;
employment
topped 50,000
for 1st time
Offers same-day
freight service
via passenger
aircraft
1988
1986
1985
1987
More than
10,000 Travel
Agency offices
using
SABRE, available
on PC in ‘87
Expansion
includes
acquiring Airbus
300 and 1st
airline to fly
Boeing 757
9. American Airlines Timeline
A New Era: early 1990’s
Opens System
Operation Control
Center
Opened state-ofthe-art
Maintenance
facility at DFW
1990
1991
1991
1992
Flew its 1 billionth
customer
Introduced VALUE
PRICING: a plan
designed to make
fares
simple, sensible, a
nd fair.
10. Market Structure
– Deregulation of 1978
• Civil Aeronautics Board
• Free market
– Some countries and still regulated to some
extent
• Europe
• Asia
12. Characteristics of an Oligopoly
– Interdependence
• “Bags fly free”
– Price setters
– Few firms
– High barriers to entry
13. Competitive Advantage
“Innovation”
• SABRE
– Computerized Reservation System(CRS)
– American was the first airline to implement such a
system.
– By 1990, SABRE was the largest reservation system
in the world and had a market share of 40%.
– Screen Bias
14. Competitive Advantage
“Innovation”
• Advantage Frequent Flier Program
– In 1980, AA introduced the first frequent flier
program.
– Many other airlines followed due to the huge
success of this program.
– Originally the only reward available for AFF
members was free tickets. This evolved into a
point system that also offered a variety of
products that were presented in a catalog.
15. Competitive Advantage
“Innovation”
• Two Tier Wage System
– Starting wages would be on the lower tier.
– Existing employees would be on the higher tier.
– In response to the high wage requirement stated
by union contracts.
– Starting salaries could be up to 50% less
– Necessary to compete against the newly formed
companies that were non-union.
16. Competitive Advantage
“Innovation”
• Airline of the Year 1988 & 1989
– Mostly due its focus on service
• On Time arrivals in Sept 1989 - 84.6%
– Better than Delta or United
• Customer Service Complaints 1989 – 132,000
– Better than United
• Baggage Service Complaints 1989 – 5,999
– Better than Delta and United
17. Competitive Advantage
“Innovation”
• Robert Crandall
– Became CEO in July of 1980
– “ The physical aspects of our
company are very much like our
competitors. After all, we all use
the same airports, the same
planes; we buy food from the same
caterers, we use the same
computers, and so on. Its pretty
clear that the only difference
between “us” and “them” is our
ability… the ability of all of
American’s people to provide
superior service.”
19. 66 different pricing for
one flight.
Example of Pricing
• What is the customer
willing to pay.
• Overbooking practice to
make sure the flight is
full.
• Adjust pricing based on
passenger load factor
• Sophisticate computer
system to maximize
profits based on demand
and supply.
20. Game Theory
Thus, both airlines will set their fares to $200, a
similar analysis was carried out in court to
prove that there was price fixing among airlines
and in October 1994 some airlines settled for
$40 M.
American
Airline $500
American
Airline $200
Competitors
$500
AA Profits=$50
Competitor=$100
AA Profits=-$100
Competitor=$200
Competitors
$200
AA Profits=-$150 AA Profits=-$10
Competitor=-$200 Competitor=-$10
22. Milestones to Modern Day
• SABRE spins off into its own company.
– Subsidiaries include: Travelocity, Sabre Travel
Network, Sabre Airline Solutions and Sabre
Hospitality Solutions.
23. • American partners with Travel Agents to provide consumers
with better pricing, while reducing distribution costs.
• American celebrated the 25 th anniversary of its AAdvantage
program – the world’s first frequent flyer program that
revolutionized the airline industry and set the standard for
similar initiatives in many other businesses. AAdvantage
began with 300,000 members. Today, it has more than 50
million members.
25. Industry Leaders Then…and Now
1990’s
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Aeroflot
American
United
Delta
Northwest
British Airways
Continental
US Airways
TWA
Japan Airlines
2000’s
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Delta
Southwest
American
United
Lufthansa
Air France
China Southern
Ryanair
Continental
US Airways
26. Low-Cost Airline Impact
Locally: Southwest entrance into MSP
Southwest's entry into Minneapolis has been closely watched because it is an assault on a so
called fortress hub of Northwest Airlines, which is now a part of Delta Air Lines Inc.
Northwest has a reputation for matching competitor prices and adding extra flights when its hubs
are threatened. Last month Northwest executives said they would do both of those things on the
Chicago route once Southwest's service starts. – USA Today
•
"We are likely to be in for some serious fireworks on prices out of Minneapolis in the coming
days for spring travel" FareCompare.com CEO Rick Seaney. Adding “that the cheapest fare on that
route for Northwest, American and United is round trips for $376, which works out to $188 each
way. The cheapest one-way fare is $426, Seaney wrote.
• "The legacy airlines will quickly have to restructure their airfares, by offering one-way fares
instead of the two-night minimum stay roundtrip fares they currently file — likely matching
Southwest's new price points," Seaney wrote.
27. Low-Cost Airline Impact
Globally:
The CAA (Civil Aviation Authority) calculates that growth in short-haul traffic
between 1996 and 2006 averaged five per cent a year – no greater than in the
years before the arrival of no-frills airlines. The only years when growth
exceeded 10 per cent in the past 20 years was in 1987 and 1994.
Although nearly half of all British passengers on short-haul routes now opt for
no-frills airlines, this growth seems to have been at the expense of other
carriers – both scheduled and charter airlines – which have been forced to
close down unprofitable routes.
The CAA report shows that since the advent of low-cost flights in 1996 there has been
no marked change in the socio-economic profile of air passengers. "The main effect of
no-frills flights is to provide further opportunities to those in middle- and higher
income groups to fly more often.” – Dr. Harry Bush, CAA Director of Economic
Regulation.
28. Quiz
• When did AA start the frequent fly program?
– 1980
• When did AA begin trading on the NYSE?
– 1939
• When did deregulation take place in the US?
– 1978
• When did AA fly its 1 billionth customer?
– 1991
• Who has the highest market share in the Domestic
Airline Market?
– AA
29. Quiz
• Name 2 characteristics of an oligopoly?
–
–
–
–
Interdependence
Price setters
Few firms
High barriers to entry
• Who introduced the first frequent flyer program?
– AA
• Who is the current CEO of AA?
– Robert Crandall
• How many members are a part of the frequent flyer program?
– Over 50 million
30. Bibliography
•
•
•
•
Wikipedia, Oligopoly, 2010
Wikipedia, Airline, 2010
Wikipedia, Airline Deregulation Act, 2010
Research and Innovative Technology
Administration, Airline Domestic Market Share
Dec 2008 – Nov 2009
• www.AA.com (American Airlines)
Editor's Notes
In a move to make popular Web fares more widely available to consumers while reducing its total distribution costs, American on Sept. 25, 2002, announced its innovative EveryFare program. With EveryFare, AA provides traditional travel agents in the U.S. and Canada the option to access and sell its very low Web fares, previously offered only via American’s own Web site, AA.com, and select low-cost distribution channels. In exchange, travel agents provide AA with long-term distribution cost savings through a creative cost-sharing arrangement.
This graphic shows the volatility since this article took place.