COMPETITIVE ANALYSIS AMERICAN AIRLINES By Bailey Anderson Angela

COMPETITIVE ANALYSIS: AMERICAN AIRLINES By: Bailey Anderson, Angela Chavez, and Tucker De. Vinny

OVERVIEW • SWOT Analysis - American Airlines • SWOT Analysis - United Airlines • AA vs. United • SWOT Analysis - Delta Airlines • AA vs. Delta

AAdvantage Loyalty Program to offer a wide range of services while keeping customers purchasing through the company AMERICAN AIRLINES: STRENGTHS International Alliance to allow passengers to fly all over the globe using American Airlines and its partners A high standard for customer satisfaction Strides in innovation to enhance the travel experience from the arrival to the destination

Limited aircraft suppliers mean relying heavily on a select few, increasing risk if anything were to go wrong • Boeing 737 MAX leads to multiple flight cancelations Leading in revenue, but profit margins are substantially lower than competitors • Long-term profitability is on the line with narrow margins AMERICAN AIRLINES: WEAKNESSES

AMERICAN AIRLINES: OPPORTUNITIES Growth in the travel industry over the recent years Use and control of the "hubs" throughout the United States Based on consumer trends American Airlines controls a majority of domestic connectivity at Dallas Fort-Worth International Airport and Charlotte Douglas International Airport State of the Economy

AMERICAN AIRLINES: THREATS Sensitivity to changes in the price of oil Growth of Low-Cost Carriers • American Airlines avoids fuel hedging • Price per share decreases as oil prices increase • Not as profitable, but still affecting American Airlines' market share • Responding to threat by offering "basic economy" seats

UNITED AIRLINES: STRENGTHS Formed a strategic alliance called Star alliance • Comprised of 28 partners One of the top three rated airlines in the US for On-Time Performance • One of two to get a four-star rating from the Official Aviation Guide • Shows reliability

UNITED AIRLINES: WEAKNESSES Public relation issues in recent years Selective outsourcing can be risky Decline in percentage of people who would consider booking with United Airlines Can increase expenses Affects United employees if independent contractors are brought in

Uses "hubs" at the major airports in the United States UNITED AIRLINES: OPPORTUNITIE S • Has control over O'Hare International Airport and Denver International Airport Took advantage of "rebanking" to increase revenue at "hub" airports • Adjustments to flight schedule for domestic flights benefited connections

UNITED AIRLINES: THREATS • Not only competing with Low-Cost Carriers • United is on average more expensive than most domestic airlines • Not as appealing to middle-class and lower-income consumers • Also sensitive to changing fuel prices

AMERICAN AIRLINES V. S. UNITED AIRLINES • Strengths • Both are part of an alliance (One. World, Star Alliance) • AAdvantage rewards program is very beneficial • United is ranked top 3 for On-Time Performance • Weaknesses • American Airlines has a limited number of aircraft suppliers unlike United • United has issues with public relations • Rising Fuel Cost • Opportunities • Use hubs at major airports (AA with DFW, United O'Hare in Denver) • Using hubs to make connecting flights easier to schedule • Threats • Low-Cost Carrier Airlines • Oil and gas prices rising • United is not as appealing to the middle and lower-income consumers

Revenue Premium Airline Hub DELTA: STRENGTHS Multiple Hubs High Customer Engagement Focus on Business Travelers Operating Strategy

DELTA: WEAKNESSES Poor Margins Unnecessary Investments Brand Switching

DELTA: OPPORTUNITIES • Growing Demand for Business Travel • Providing benefits • Providing customized service

DELTA: THREATS COMPETITION LOW-COST AIRLINES

• Strengths: • Both American and Delta have multiple hubs across the country • Delta has high customer engagement while American has a high customer satisfaction rate AMERICAN AIRLINES V. S. DELTA • Weaknesses • Delta has been "brand switching" to compete with LCC while American has been creating new strategies • Both airlines struggle with poor profit margins • Opportunities • Delta wants to specialize in business travel while American is trying to use and control more hubs around the country • American is using the growth of the travel industry to their advantage • Threats • Low-Cost Airlines • Rising cost of oil and gas

CONCLUSION American Airlines is still the leading airline!