SWOT analysis of American Airlines
This detailed SWOT analysis of American Airlines aims to address some of the internal and the external factors that affect American Airlines. It aims to analyse the strengths and the weaknesses of the airline. It also aims to explore the opportunities the airline should pursue and the threats it should keep an eye on.
Strengths of American Airlines
American Airlines is one of the largest airlines in the world. It is a founding member of the oneworld® alliance. The oneworld® alliance is an alliance of 13 of the world’s leading airlines and 30 affiliated carriers (as of October 2019). American Airlines, together with its regional partner American Eagle, offers around 6,700 flights a day to 350 destinations in 50 countries. The name of the parent company of American Airlines is American Airlines Group (American Airlines, 2019).
AAdvantage is the loyalty programme of American Airlines. As AAdvantage members, passengers can earn miles when they fly American, oneworld® and other participating airlines, as well as over 1,000 partners (American Airlines, 2019). They can then use the miles in a number of ways. For example, they can upgrade to the next cabin on select flights. Then can also use the miles for hotel stays, rental cars and other retail products. Interestingly, they can use the miles they have accumulated for themselves or for anyone else they like! It is worth mentioning that miles here do not mean how many miles passengers fly, rather how much they spend on flights.
American Airlines has a very good reputation for onboard entertainment. Passengers can use overhead screens, seatback screen, and personal devices (e.g. phone, tablet or laptop) to enjoy free movies, TV Shows, music and games. These entertainment provisions help the airline increase customer satisfaction and attract new customers. It should be mentioned that if passengers would like to use their personal device for entertainment onboard, they need to download American Airlines app before their flight.
Financial position of the American Airlines is also an important aspect to consider in this analysis. The company reported a pre-tax profit of $1.9 billion for the full year, 2018. The net profit for the same period was $1.4 billion (American Airlines, 2019)
Weaknesses of American Airlines
American Airlines has been accused of discrimination and disrespectful behaviour. In October 2017, NAACP issued an unusual warning to African Americans informing that they could face disrespectful behaviour and discrimination if they fly on American Airlines (Jan, 2017). The warning was issued following a number of complaints NAACP received from American Airlines passengers. However, it should be mentioned that the airline has expressed its disappointment with the NAACP’s travel advisory.
There are some other problems American Airlines experienced recently. For example, the airline had a technical problem with its pilot scheduling system in December 2017. Its computer system accepted time off request from any pilot who wanted it regardless of whether the pilot deserved it (Sumers, 2017). This created a chaos and made many passengers worried. According to some analysts, this has also caused tension between the airline and Allied Pilots Association (the pilot union).
Opportunities for American Airlines
American Airlines has more expansion opportunities than many other airlines. It announced international service to Budapest, Prague, and Reykjavik in 2018. It has opportunities to introduce more routes to its domestic and international markets. For example, American Airlines can grow further by using Charlotte’s airport which is its second-largest hub. The airport opened new domestic gates in summer 2018 bringing the total gate count to 111. It has plans in place to open more gates and concourses throughout the airport (Reed, 2018). This is certainly a good opportunity for American Airlines. Likewise, rise in both global and US tourism offers American Airlines more opportunities for growth.
Threats to American Airlines
Threat is the last element to address in the SWOT analysis of American Airlines. Fierce industry competition is a threat to American Airlines. The airline faces a stiff competition from a number of competitors e.g. Southwest Airlines Company, Delta Air Lines, JetBlue Airways, and United Continental Holdings. Competition from some giant airlines in many of the international routes is also a big challenge for American Airlines.
Different types of natural disaster have always affected air travel and airport infrastructure (Smith, 2018). Fire, earthquakes, tornadoes, and floods can severely impact on airports and aviation facilities. They can easily cause flight delays, cancellations, and other disruptions.
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Last Update: 24 November 2019
American Airlines (2019) American Airlines Group, available at: https://www.aa.com/i18n/customer-service/about-us/american-airlines-group.jsp (Accessed 22 November 2019)
Jan, T. (2017) NAACP’s American Airlines warning is a wake-up call to corporate America https://www.washingtonpost.com/business/economy/naacps-american-airlines-warning-is-a-wake-up-call-to-corporate-america/2017/10/25/68ecb558-b9b8-11e7-a908-a3470754bbb9_story.html?utm_term=.72fee0ea86f1 (Accessed 01 April 2018)
Reed, T. (2018) American Airlines Wants To Grow In Charlotte; The Airport Is Building As Fast As It Can, available at: https://www.forbes.com/sites/tedreed/2018/01/31/american-airlines-wants-to-grow-in-charlotte-the-airport-is-building-as-fast-as-it-can/#3e55972414a2 (Accessed 02 April 2018)
Smith, G. (2018) Natural disaster vulnerability, available at: https://www.burnsmcd.com/insightsnews/insights/aviation-special-report/2011/natural-disaster-vulnerability (Accessed 06 April 2018)
Sumers, B. (2017) American Airlines Solves Its Holiday Pilot Problem and Will Not Cancel Any Flights, available at: https://skift.com/2017/12/01/american-airlines-solves-its-holiday-pilot-problem-and-will-not-cancel-any-flights/ (Accessed 02 April 2018)
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Author: Joe David
Joe David has years of experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality and tourism management.