Reducing debt at the current time also provide increased flexibility for the future, facilitating greater access to different sources of capital, where there may be restraints on the existing level of debt. Lower levels of debt may also facilitate other practice, such as increased use of hedging in order to protect the organization could increase operating costs from rising fuel prices, a practice that requires a relatively strong financial structure due to the financial resources required to undertake that in practice, the impact that accounting policies may have with the derivatives used for hedging measured at real market value (Morrell and Swan 2006)
The expansion into the Asia region will also increase diversification of the markets by American Airlines. In addition to providing more revenues, this may also help to provide risk diversification, reducing exposure to negative impacts or economic shocks that are found in individual/regional markets (Quick MBA, 2015)
market, which is a relatively mature market with a lower growth potential due to the slow economic growth (The Economist). Furthermore, in a mature market, expansion for an airline may be difficult due to the barriers, mainly access to desirable takeoff and landing slots at major airports (Simaiakis et al
S. market, which is a relatively mature market with a lower growth potential due to the slow economic growth (The Economist)
to cater to business fliers Identified and recognized to have the best customer loyalty program and customer amenities and services Strong brand image that boasts of many new routes since 2010 Great image about the onboard entertainment content Has a strong fleet of more than 600 carriers and a wide reach of over 250 destinations Among the oldest carriers in the industry, well established brand name and recognized as the only old and legacy carrier that have not filed for bankruptcy. Confidence of the investor in the company is high due to excellent cash flow in the company Returns on investments are highly rated Advantages of enrollment of more than 50 million customers along with a high proportion of the seating level among legacy carriers Equipped with the highest proportion of redeemable seating capacity and which is amongst the highest in the category of legacy airlines (Forbes & Lederman, 2009) Weaknesses The Financial position of the company over the years is a cause for concern The company has lost some market share to the LCCs and the other competitive players in the segment Inability of staying in competition for long international flights when compared to other foreign carriers and rivals which tend to dominate the industry with their quality services Fuel hedging contracts and agreements are not possible due to the weak financial position of the company Financial analysts continue to forecast not so good profit margins for the company Union and labor issues in the company have been pulling back the company and are stumbling blocks in the path success and economical gains Over dependence in the resurgence in demand and not taking enough steps boost demand and growth Along with the weakness o the West Coast, the airline is plagued by its inability to reach the Asian markets due to this factor (Mudde & Sopariwala, n
to cater to business fliers Identified and recognized to have the best customer loyalty program and customer amenities and services Strong brand image that boasts of many new routes since 2010 Great image about the onboard entertainment content Has a strong fleet of more than 600 carriers and a wide reach of over 250 destinations Among the oldest carriers in the industry, well established brand name and recognized as the only old and legacy carrier that have not filed for bankruptcy. Confidence of the investor in the company is high due to excellent cash flow in the company Returns on investments are highly rated Advantages of enrollment of more than 50 million customers along with a high proportion of the seating level among legacy carriers Equipped with the highest proportion of redeemable seating capacity and which is amongst the highest in the category of legacy airlines (Forbes & Lederman, 2009) Weaknesses The Financial position of the company over the years is a cause for concern The company has lost some market share to the LCCs and the other competitive players in the segment Inability of staying in competition for long international flights when compared to other foreign carriers and rivals which tend to dominate the industry with their quality services Fuel hedging contracts and agreements are not possible due to the weak financial position of the company Financial analysts continue to forecast not so good profit margins for the company Union and labor issues in the company have been pulling back the company and are stumbling blocks in the path success and economical gains Over dependence in the resurgence in demand and not taking enough steps boost demand and growth Along with the weakness o the West Coast, the airline is plagued by its inability to reach the Asian markets due to this factor (Mudde & Sopariwala, n
it has however managed to claw back into the realm of profits since then. It is recognized as a legacy airline (Aa.com, 2016)
it has however managed to claw back into the realm of profits since then. It is recognized as a legacy airline (Aa.com, 2016)
On the other hand, however, the very low fuel costs due to lowering of crude oil costs globally has given an opportunity to the airline to enhance profits. Stricter emission standards and environment regulations all around the world means that the airline now has to induct more environmentally friendly technologies on the aircraft and replace old fleets which are cost-intensive propositions (Augustine, n
The industry is distinctly divided into the majors and discount carriers. Low pricing strategies are employed by discount carriers which are cutting profit margins of majors to a significant degree (Ben-Yosef, 2005)
The current ratio, the quick ratio and the cash of the company have been very steady for the company at around 80%, 75% and 60% respectively over the last four years. this indicates that the company has a comfortable cash reserve and liquidity position and enough resources to serve its short-term debts (NASDAQ.com, 2016)
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American Airlines, Inc. (AA), commonly referred to as American, is a major American airline headquartered in Fort Worth, Texas. It is the world's largest ...
Airline Overview. Founded in 1931 as American Airways, American Airlines (AA) is the world's largest airline when measured by revenue and fleet size.
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