Overview
American Airlines, a founding member of one world, is one of the largest airlines in the world. With its affiliates American Eagle® and American Connection, it serves some 260 destinations including more than 150 in the USA, and 40 countries. American Airlines network covers points throughout North America, the Caribbean, Latin America, Europe and the Pacific. American has major connecting hubs at Dallas/Fort Worth, Chicago O'Hare, Los Angeles, Miami, San Juan and New York., make traveling with American the first choice of millions of travelers. AA’s current chief executive officer is Tom Horton. As per 2010/2011 financial year results, the company recorded total revenue of $22.17 billion, and operating income of $308 million. Its …show more content…
The chart below shows the way the US airline industry fared in the last decade. It is evident that the whole industry has been struggling. However, airlines have recovered and are now recording positive results. On its part, American has been making losses since 2001 to date (records for 2011 are not shown but the financial statements of the firm shows that the company recorded a loss of …show more content…
Other Alternatives
In 2009, the Corporation filed for chapter eleven bankruptcy protection. This is points out that the financial position of the whole corporation is in a very weak state. This crisis, however, can be resolved by limiting the number of divisions that the company operates. It must be noted that when AA when was formed in 1930, 82 small airlines were conglomerated after acquisition. The number of divisions operated by the corporation has grown to an extent that diseconomies, instead of economies, of scale are reaped.
The sizes of these divisions have affected adversely both cost and debt structures of the company. Sale of some or all the unprofitable divisions may save the company from the headache of laying the 13,000 it intends to layoff (Perrott, 2011). Precisely, sale of the unprofitable divisions will improve the company’s cost structure, and place it in a better financial position (Johnson, 2011). Additionally, the airline (or the entir Corporation) should consider entering into negotiations with employees’ trade unions with an aim of improving the cost
American Airlines, a founding member of one world, is one of the largest airlines in the world. With its affiliates American Eagle® and American Connection, it serves some 260 destinations including more than 150 in the USA, and 40 countries. American Airlines network covers points throughout North America, the Caribbean, Latin America, Europe and the Pacific. American has major connecting hubs at Dallas/Fort Worth, Chicago O'Hare, Los Angeles, Miami, San Juan and New York., make traveling with American the first choice of millions of travelers. AA’s current chief executive officer is Tom Horton. As per 2010/2011 financial year results, the company recorded total revenue of $22.17 billion, and operating income of $308 million. Its …show more content…
The chart below shows the way the US airline industry fared in the last decade. It is evident that the whole industry has been struggling. However, airlines have recovered and are now recording positive results. On its part, American has been making losses since 2001 to date (records for 2011 are not shown but the financial statements of the firm shows that the company recorded a loss of …show more content…
Other Alternatives
In 2009, the Corporation filed for chapter eleven bankruptcy protection. This is points out that the financial position of the whole corporation is in a very weak state. This crisis, however, can be resolved by limiting the number of divisions that the company operates. It must be noted that when AA when was formed in 1930, 82 small airlines were conglomerated after acquisition. The number of divisions operated by the corporation has grown to an extent that diseconomies, instead of economies, of scale are reaped.
The sizes of these divisions have affected adversely both cost and debt structures of the company. Sale of some or all the unprofitable divisions may save the company from the headache of laying the 13,000 it intends to layoff (Perrott, 2011). Precisely, sale of the unprofitable divisions will improve the company’s cost structure, and place it in a better financial position (Johnson, 2011). Additionally, the airline (or the entir Corporation) should consider entering into negotiations with employees’ trade unions with an aim of improving the cost