American Airlines

Situational Analysis:
Internal factors:
Joint Venture with Japanese Airline
Partnership with JetBlue
Member of oneworld alliance
International – Flies to North America, the Caribbean, South America, Europe and Asia Number of routes
AAdvantage frequent flyer program

Older airplanes
Unstable chairs on their airplanes
Current financial situation

Don't use plagiarized sources. Get Your Custom Essay on
American Airlines
Just from $13/Page
Order Essay

External factors:
Merge with another airline
Reorganization of their company
Successful retrenchment strategy
Increase profits
Update planes
Purchase new aircrafts
Satisfy consumer needs

Company filed for bankruptcy in November 2011
Competition with competitors low cost strategy
Price of fuel has increased
Labor costs have increased
US economic slowdown

Problem: American Airlines is struggling with higher costs, mainly, higher fuel costs and labor costs. These costs became so excessive, that American
Airlines had to declare bankruptcy. Alternative 1: American Airlines needs to emerge from bankruptcy as a profitable company, which would enable them to explore the possibility of a merger with another airline provided that the two airlines combined would provide efficiencies and higher profitability.

Potential increase in profits
Opportunity to eliminate duplicate costs
Potential to enhance brand recognition because now they will have more routes and more to offer
Always potential for disruption and disorganization as the merger takes place The cost of the merger (usually underestimated)
Miscalculation of the difficulties of merging two corporate cultures

Alternative 2: They must use the bankruptcy process to lower their labor cost, both by wage concessions and more efficient work roles. Strengths:
Lower costs
More efficiency of workers
Potential increase in profits
Lead to lower flying inconveniences
Help exit bankruptcy

Resistance from the employees
Disruptions could cause cancelations

Alternative 3: Use the bankruptcy to lower other employee costs such as medical insurance and pension. Strengths:
Lower labor costs
Help exit bankruptcy
Decrease debt

Resistance by employees
Weaken relationships among employers and employees

My recommendation would be alternative two: They must use the bankruptcy process to lower their labor cost, both by wage concessions and more efficient work roles. I’m assuming that this alternative will lower costs the most. American Airlines needs to use the bankruptcy process to implement this alternative effectively. They need to go before the bankruptcy court asking them to cooperate to seek wage concessions and more efficient work roles.

A combination of the legal department and the finance department need to be in charge of implementing this alternative. This is a legal matter but the finance department must explain to the legal department what is needed in terms of financial relief. This needs to be implemented as soon as possible. It must start in the bankruptcy court. This can be evaluated by examining if this alternative does lower cost without completely destroying employee to employer relationships. The finance department needs to evaluate their financial numbers (examining costs) on a monthly basis.

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages

Order your essay today and save 15% with the discount code SAVE15