American Airways: Analysis of American Airlines

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Table of Contents

Introduction
Regulation of irregular
Finance
Problems facing American Airline
Conclusion
References

Introduction

American Airway was established in 1920 and later in 1934, it was formed to become American Airline. American Airlines is one of the developed industries worldwide because of its participation globe-wide in the business. Since its establishment, it has grown up to have a complex structure of management. It has several departments which run its management to make a profit and to work efficiently. An example is in 1982 where AMR Corp was introduced and became the holder of American Airlines. This was followed by AMR services formed in December 1983 which was a subsidiary to provide the Airline with aviation services to support other airlines. In 1992, AMR Consulting Group was formed as a subsidiary which expanded to be an airline training school and also consulting group. In 1993 the AMR Corp introduced the SABRE Technology Group which included the department of the Information Services (ARMIS), STIN – SABRE Travel Information Network, SCS- SABRE Computer Services, SDS – SABRE Development Services, and risk assessment/project consulting units. The American Airline completed its work of the spirit of SABRE in 2000 to manage itself. The chairman who was elected was Gerard J. Arpey to head the ARM cooperation and the airlines in 2004

For American Airlines to succeed it has got different departments to have it run efficiently and give it profit. The different departments are run by different staff. The cooperate management or structure in organizations includes the Board of Directors, AMR Corporation officers, Core businesses, American Airline senior management, American Beacon Advisors, American Airline management, and American Eagle management.

According to International Banking, AMR ranked 902 worldwide as recorded by Forbes magazine and 312 (in2006) in the 500 fortune Global list.

The departments in American Airlines are different and carry different businesses, the businesses within the structure of cooperation include American Airlines, American Airlines cargo, American Airline travel beacon advisors, and American Airlines Eagles. We have also different facilities within the Airlines, which are the Flagship University, American Airlines C.R Smith Museum, American Airlines Travel Academy, and American Airline Flight Academy.

The statistics show that American Airlines holds $29, 4495 million in terms of assets, it has 88,400 staff members and it operates in all six continents worldwide.

The airlines have provided comp ability, convenient, safe dependable, and friendly means of transportation to its customers. The demand of the customers depends on the hospitality of the airline. The airline on these conditions has taken measures to ensure that their customers are safe. They provide this service by ensuring that the aircraft are maintained well. The territory across the airlines is safeguarded to give proper security measures.

In June 2007, DOT -Department of transport was submitted with a service plan which gave the issues concerning the customers. This included the reduction of the fare, accommodation of the customers, provided the baggage liability, the ticket refund facilities, and the frequent flyer program-AAdvantage (www.americanairlines.co.uk/)

In the transportation sector, the airline provides passenger services and cargo services, it started using Curtis condors in 1934 and it has expanded to have the current efficient aircraft. Despite the fall of many aircraft for the past years, American airlines have played an important work in the aviation industries in the United States. For example, it benefited when the eastern airlines collapsed as it acquired the routes in the eastern to Latin America. In the year 1992, it became the major airline when the pan AMTWA and eastern collapsed. At the start of the millennium, the American airline with united and delta have remained among the powerful three passenger-carrying services in the united state, recently the American airline bought the TWA in 2001, and it has planned to operate it (TWA) as a subsidiary until when it has integrated all of the TWA’S staff and TWA’S operations.

American airways also have participated in the provision of cargo services. Despite some delays sometimes the management team has been ensuring that their customer’s needs have been ensuring that the cargo has been dispatched at the correct time. Also, the cargos are handled in such a manner that it pleases their customer. The storage system is well equipped which enables the cargo to be stored in a nice place example the AMR the handling arm of American airlines. The America airline has also participated in the transportation of the animals. This has promoted tourists in many parts of the United States and other countries worldwide cargo transport also offers the baggage allowance which makes it promote the industries as it attracts the customers hence promoting its profit.

As noted by Moody (2005) American airlines have targeted foreign routes to make a profit. It operates between the continents to have a wide market. The airline has co-operated with the United States airlines, British airway, and Virgin Atlantic airways along with other countries to expand the market for a profit.

In 2008 April, American Airlines had put in measures by checking electrical systems, it has replaced the carpets, examined engines and flaps for any defects or corrosion. This will ensure that there is security on the way and no risk of accidents on the way. The measures have promoted the industry as many customers will flow in due to the safety of the aircraft.

Another measure taken by the American airline is the cutting of the cost. This has promoted the sector by attracting many customers as many will prefer cheap costs as compared to expenses they will encounter in other airlines. By doing this American Airlines will meet its target by making a huge profit.

Regulation of irregular

The unions, businesses men, and members of congress suffer when the maintenance is not efficient. To have a regular schedule will give these people profit hence attracting them. American airline is ensuring that there is no irregular in its operations. This will attract many businessmen to use their flight hence giving them profit. (George, 2006)

Security- the American airline has ensured that there is enough security for its customers and facilities; the security guard is on the watch to ensure that there is no threat of insecurity within the airline or during the flight. The safety of this was attracted more market hence the profit the tide checkup of the terrorists have been its customer assurance of safety staff. American airlines have qualified staff members they do by training them before they can be given any job in the industry. This will ensure work efficiency and thus attracting customers. The staff is trained differently in various departments to ensure that each department gives quality services to the customers. The security staff ensures enough security in the airline and during the flight, maintenance services ensure that no wreckage of the aircraft or the facilities within the airline’s hospitality group ensures that customers are well taken and so on. The management teams on the other hand are well-qualified professionals. They have experiences that ensure that the airlines meet their goals and hence profit. The management team also trains and recruits qualified staff members.

Finance

American airline is among the world’s largest carrier and this makes it to have a large amount of finance and thus it need proper management to do this. The American airline has increased the revenue by reducing fraudulent ticket processing by finding quick and efficient data to query their warehouse. This exposed fraudulent ticketing and saved $5 million in the 5 years, also $250,000 was saved in developing costs and reduced the space in the storage. (George, 2006)

The American eagle, the American connection, and American airlines provide services to more than 250 cities (41) countries- it has 1100 airplanes and operates 4400 flights a day. This needs around 125 million documents annually in transportation. The large amount created by this data needs an efficient system that proper amount earned on the revenue ticket sale. This is not a small task.

The airline wanted to hire an outside consultant to custom build a data warehouse but it was estimated that it would be more expensive and introduced a Sybase technology. Sybase IQ is ten times than other competitors (two soft wares)

According to George (2006), the airline introduced the Sybase plus other warehouse technologies which gave efficient solutions. Sun microsystem helped in server and storage hardware, computer associates on the other side gave the report – generation software. This data was named RADAR. This has simplified the airline operation simply by adding more storage and loading system upgrades as the business grows.

The revenue Account Data access Resource (RADAR) has helped American airlines to detect fraudulent ticket processing, proper sale of track tickets and gives proper revenue also faster and looks into deep analysis besides storing a 113-month data and recording of the historic reports over a long period. The use of this system saved $250,000 compared to the outside warehouse data. The Sybase IQ saves about $15K per year and it has saved around $50 million by identifying forms of fraud.

The system has become the best practice in the company it has provided to business analysis, security analysis, auditors and reduced the amount of storage the airline auditors and refused the amount of storage the airline needs for a data warehouse example the Sybase IQ about 2 megabytes.

The airline has also realized that the IQ complete solution has advantages for its customers by detecting errors on tickets, improving cash flow, and thus lowering the cost of tickets.

Problems facing American Airline

American Airlines is facing a major crisis after a decade of reorganization since September 2001 attacks. The attacks made the Airline run bankruptcies. The company is then now forced to compensate the loss of that year by deducting from the current years. This gives the industry more challenge due to the expenses it will encounter by budgeting. (Joel, 2004)

The market shows that there is a default and bankruptcies rise and it shows that there will be tough to save more to replace the loss it has undergone through the crisis. The company needs therefore quick measures to stabilize it. The rising of the fuel prices has made this impact worse. The Airline is facing this problem because it must buy the fuel which costs thrice as much as the previous years. This makes the Airline face a big challenge in the market which is more competitors. It has to solve this problem by borrowing loans from other sectors and without good management of this fund the Airline will continue facing bankruptcies. (Joel, 2004)

Labor costs; – The industries are also facing another challenge of paying the staff members who are many at present. The cost of paying the workers has gone up twice as compared to the previous years. This has given many headaches to the managing team as the increased number of workers sometimes wants the pay increase which can lead the company to a big loss.

The decrease in consumer demand is another challenge to the Airline industry. The Airline is facing competition from other industries thus making it hard for the company to cope up with. The Airline must thus put the measure that will attract the customers. The measures can be the reduction of the fare, increase in the security guard, compensation of the lost items, and insurance of the consumers, and so on. These measures need a lot of money thus making the company spend a lot on its budget thus giving it a big loss in the end. (Joel, 2004)

Flight cancel is another threat facing the Airline industry in America. Every time you hear that the flight has been canceled due to weather conditions, terrorist attacks, or maintenance problems. This has given the industry a big challenge as it will go lose due to these factors. Some of these factors can not be prevented example when the weather changes. The Airline thus will have to cope up with the condition and compensate the affected customers or the delayed cargo.

Technical problems also do affect the Airline industry. American Airlines is facing a lot of technical problems with its facilities and the Aircraft. Accidents have always been happening since the innovation of the Airline. This has cost the Airline a lot as the demand reduces when the consumer knows that the accidents do happen frequently. This has made the Airline go for a very big loss due to lack of demand on the market. The company has taken measures to ensure that consumer demand is made. This has led to the Airline spending a lot of money and at times incurring losses.

Conclusion

The American airline has succeeded due to the measures it took on its management.

Staff member;- the airline has well-trained employees. It trains its staff members to ensure that they work to meet the requirements of the consumers. The well-maintained security ensures the safety of the customers, the maintenance of the facilities and aircraft gives the airline proper working conditions done by the engineering group while the hospitality group ensures that the customers are well taken off.

American Airlines has also provided the customer plan draft which gives the customer priority to the airline services. The plan has given the lowest fare available; it ensures that the customers travel together with their baggage. The plan also ensures the safety of the customer’s luggage by providing the bagged liability. Customers are also provided with accommodation in case of delays, cancellations, or diversion events. There is also a ticket refund services, flight with over sales, frequent flyer program-Advantage.

In the department of finance and warehouse, the airline has introduced the Sybase IQ. This has simplified the airline operation by adding more storage and loading system upgrades as the market grows. The system detects fraudulent tickets, proper sales of the ticket, and gives proper revenue.

The airlines have also been divided into various departments and each department plays its role. The allocation of funds to these departments ensures that there is efficiency in the working conditions of each department.

The airlines provide safe, dependable, friendly transport comfortable and convince way of transportation.

References

George, C. (2006).American airlines, New York, McGraw-Hill, pp.30 -40.

Gary, H. (2004). Hoover’s Handbook of American Business. Reference press, pp.154 -166.

Wilson, H (2003).current Biography. New York, H.W.Willison, pp. 662 -670.

Joel, L. (2004). The penny pincher’s passport to luxury travel traveler’s tales, London, Cambridge University Press, pp. 84-90.

Moody, I. (2005). Moody transportation manual. Moody’s investors services, pp. 636 -640.

American Airline, Web.

American Airlines Cargo, Web.

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