American Airlines Case Study Analysis
Introduction
American airlines is a Texas based giant aviation and is one of the largest airlines in the world which had started it operations in the year 1926 and Charles Lindbergh flew the first flight of the American Airlines.At first the airline started its operations by carrying mails then in 1930 it was transformed into passenger airlines. The American Airline has a current fleet of over 900 aircrafts. The American Airline had unsurprisingly seen adequately of ups and downs over its 100 years history.
The airline is a one-world alliance member that has functioned the whole lot from Douglas DC 3s to the Boeing 777. The (Texas) based giant has grown from its origins and converted itself from a mail carrier to a well-known passenger airlines in the world. The airline also initiated many other innovations and technologies and strategies. Together with the series of mergers that has strengthened the airline, it now holds a privileged amount of brand recognition.
While in year 2019-20, the COVID-19 has impacted the whole world, its impact on the aviation industry can be considered as a devastating and has tipped the airline industry in to unparalleled crisis which has resulted airlines to deal with the major challenges. The main problems that airlines had to face during pandemic were a significant drop in demand for air travel as movement was restricted and customers’ confidence on the air travel was also reduced because of health concerns. The major drop in the air travel demand lead to a severe deterioration in the revenue of the airlines and the excess of capacity which had resulted in the financial pressure for the airlines.
Problem statement
The major problem that the airline had to deal with during the COVID-19 was the sharp decline in air traffic, which provoked the airlines to cut capacity and the restrictions on the movements by the government to halt the spread of the virus also tipped a deterioration in the capacity of the airlines. This drop in demand created a sharp fall in the revenues of the airlines. The airlines had to adapt to these changes and come up with strategies that would reduce the cost and alleviate revenues for the airlines.
Situational Analysis
Covid 19 pandemic has taken down the entire business around the world, especially the aviation industry. The top-ranking airlines were also affected by the down lashes of the deadly viral strain. The major problem faced by the aviation industry as a whole and American Airlines was the travel restrictions imposed by the governments and the WHO for containing the dreadful impacts of the virus. This was a beneficial step for avoiding an increase in the death rates globally but had a severe impact on the aviation industry worldwide.
The businesses were affected due to the reason that the business meeting was held online and travel and tourism were also banned. The air industry mainly benefitted from two types of travelers, the business ones and the economic travelers. Business traveling was restricted due to online meetings held on Zoom and economic travelers were also restricted due to health-based restrictions and a ban on travel and tourism. All these had a huge negative impact on the revenue generation of Air America which was considered the top airline service not only in America but in the world. Despite being on top the firm was greatly hit by the outbreak of Covid 19.
In addition, due to the drop in the demand for passengers, cargo-driven flights were introduced which was a beneficial opportunity during this restricting time but did not prove much beneficial as other expenses caused due to human interactions were restricted. The employees were also hauled by the ongoing health concerns and this lagged the hiring and services being provided.
The scheduled flights were canceled as soon as the pandemic restrictions were imposed and causing an abrupt decline in the revenue generation and benefits of the firm. Statista findings declare that the number of scheduled flights worldwide during the first week of June 1, 2020, decreased by 65.1% in comparison to the first week of June 3, 2019. This shows a clear and huge decline in revenue generation for the aviation industry. These are further discussed in the frameworks presented below.
Strategic Frameworks
SWOT/TOWS Analysis
TOWS analysis is an allowance lead of SWOT analysis which classifies the strengths, weaknesses, opportunities, and threats of a company................
American Airlines Case Study Analysis
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