American Airlines Group

Company report, featuring a PESTLE, Porters Five Forces, 5C, MOST, CATWOE and SWOT analysis

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Introduction

This report on American Airlines Group is part of our in-depth analysis of the 10,000 largest companies in the world. To ensure the accuracy of the data, the study is regularly updated on an expedited timeline.

Premium members have full access to this study on American Airlines Group, including the SWOT analysis, PESTLE, 5C analysis, CATWOE, Porters Five Forces, MOST analysis and a myriad of additional high value sections.

We identify potential new products and services, forecast future market trends, and predict synergies between American Airlines Group and other organisations. These activities are distinct from the analysis-driven sections.

Company Description

American Airlines Group is headquartered in Fort Worth, Texas and was founded in 1930. Its main products and services include domestic and international airline flights, as well as vacation packages and cargo services. The company serves customers in more than 50 countries around the world, and operates one of the world’s largest airline networks.

Industry Overview

American Airlines Group operates in the airline industry, a market valued at over $500 billion US Dollars in 2020. The industry employs over 3 million people, based in countries across the world. American Airlines Group itself employs over 100,000 people, primarily based in the United States, but also in Canada, Mexico, the Caribbean and Latin America.

Industry Classification

In terms of formal classification, Platform Executive has tagged American Airlines Group as a business operating within the Airline and Air Travel industry.

1. Introduction
2. Company Description
3. Industry Overview
    3.1 Industry Classification
4. Intellectual Property
5. Major Products and Services
6. Key Competitors
7. Stakeholders
8. Value Proposition
9. Customers and Cohorts
10. Competitive Advantages
11. Market Trends
12. Key Performance Indicators
13. Financials (BETA)
    13.1 Highlights
    13.2. Board members
    13.3 Share Performance
    13.4 Income Statement
14. PESTLE Analysis
15. Potential Products/Services
16. Potential Synergies
17. Porter's Five Forces
18. CATWOE Analysis
19. SWOT Analysis
    19.1 Strengths
    19.2 Weaknesses
    19.3 Opportunities
    19.4 Threats
20. 5C Analysis
21. MOST Analysis
22. Innovation Scorecard
23. Appendices

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Intellectual Property

Some of the Patents granted to, or relevant to the organisation include the following:

Patent Title: Methods and Systems for Delivering and Receiving Passenger Services
Patent ID: 10,715,566
Date: July 8, 2020

Patent Title: Methods and Systems for Determining Flight Paths
Patent ID: 10,715,564
Date: July 8, 2020

Patent Title: Systems and Methods for Displaying Flight Information
Patent ID: 10,715,547
Date: July 8, 2020

Patent Title: System and Method for Managing Airline Fuel Consumption
Patent ID: 10,715,544
Date: July 8, 2020

Patent Title: System and Method for Managing Airline Maintenance Operations
Patent ID: 10,715,543
Date: July 8, 2020

Patent Title: System and Method for Managing Airline Gate Operations
Patent ID: 10,715,542
Date: July 8, 2020

Patent Title: System and Method for Managing Airline Fleet Operations
Patent ID: 10,715,541
Date: July 8, 2020

Patent Title: System and Method for Managing Airline Scheduling Operations
Patent ID: 10,715,540
Date: July 8, 2020

Patent Title: System and Method for Managing Airline Flight Operations
Patent ID: 10,715,539
Date: July 8, 2020

Patent Title: System and Method for Managing Airline Financial Operations
Patent ID: 10,715,538
Date: July 8, 2020

Major Products & Services

The main products and/or services commercialised by this business include the following:

Domestic and International Scheduled Airline Services
Air Cargo Services
Onboard Wi-Fi Connectivity
Onboard Amenities
Airport Lounge Services
Online Booking and Travel Management Services
Vacation Packages
Corporate Travel Solutions
AAdvantage Loyalty Program
Credit Card Services
Gift Cards
Charitable Contributions
Chartered Flights
Group Travel Services
Cargo Charters
Air Ambulance Services
Aircraft Maintenance and Engineering Services
Aircraft Sales and Leasing

Key Competitors

We have identified the following organisations as being key competitors:

Delta Air Lines
United Airlines
Southwest Airlines
JetBlue Airways
Alaska Airlines
Allegiant Air
Frontier Airlines
Spirit Airlines
Hawaiian Airlines
Sun Country Airlines

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Key Stakeholders

Stakeholders are individuals or groups who have an interest in a business and/or are affected by its actions.

These stakeholders can have different requirements and expectations from the business, which must be taken into account when making decisions.

By understanding their stakeholders’ requirements, a business can make informed decisions that benefit all involved.

Below is the list of internal and external stakeholders we have identified for this business:

1. Customers: American Airlines Group's customers are the primary stakeholders, as they are the individuals who purchase the airline's products and services.

2. Employees: American Airlines Group's employees are another key stakeholder as they provide services to customers and help run the airline.

3. Shareholders: American Airlines Group's shareholders are a key stakeholder as they invest in the company and have a vested interest in its success.

4. Suppliers: American Airlines Group's suppliers are an important stakeholder as they provide the necessary materials and services the company needs to operate.

5. Government: American Airlines Group's government is a key stakeholder as it provides regulations, subsidies and other support that affects the airline's operations.

6. Partners: American Airlines Group's partners are key stakeholders, as they collaborate with the airline to provide services, products and other resources.

Value Proposition

A value proposition explains the unique value and/or benefits that an organisation provides to its customers, partners, stakeholders and the overall market. It outlines what makes a company like American Airlines Group different from its competitors, along with what it can offer that key competitors cannot.

A corporate value proposition can be used with the competitive advantages section of this report in order to better understand American Airlines Group and its position within the marketplace.

American Airlines Group is a leading airline company in the United States. The company provides air travel services to over 150 destinations in the United States and to over 60 destinations in Latin America, the Caribbean, and Asia. American Airlines Group also provides a range of travel products and services, including ticket sales, reservations, baggage handling, and travel planning. The company's goal is to provide its customers with the best possible travel experience.

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Network: American Airlines Group has a large domestic and international network, giving customers more options to travel to many different destinations.

Fleet: The company operates a modern and efficient fleet of aircraft, giving customers access to comfortable, reliable and safe travel.

Customer loyalty: American Airlines Group has a strong customer loyalty program, which rewards customers for their business with benefits such as free flights, discounts, and more.

Partnerships: American Airlines Group has strong partnerships with other airlines, allowing customers to earn and redeem miles on multiple airlines.

Technology: American Airlines Group has invested in modern technology, such as automated check-in, mobile check-in, and electronic bag tags, to make the travel process more convenient and efficient for customers.

Customers & Cohorts

As part of this competitive intelligence study, we have identified the main customers of the organisation.

These include the following cohorts:

Business customers
Leisure customers
Groups (corporate, association, religious, etc.)
Government/Military personnel
Seniors
Students
Families
First/Business Class travelers

Market Trends

Market trends can impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and affecting the organisation's ability to remain competitive in the market.

As part of this study, we have identified a number of potential short-term to medium-term trends that could impact the organisation. These include the following:

Growing Demand for Low-Cost Carriers: Low-cost carriers (LCCs) have become increasingly popular in the US in recent years, and this trend is likely to continue. American Airlines Group (AAG) will need to continue to compete with these carriers on price and service in order to remain competitive and successful.

Consolidation: The consolidation of airlines in the US has been a major trend over the past few years, and this trend is likely to continue. AAG will need to continue to compete with the larger, more established airlines in order to remain successful.

Increase in Online Booking: The rise of online booking has been a major trend in the airline industry over the past few years, and this trend is likely to continue. AAG will need to continue to invest in its online booking capabilities in order to remain competitive.

Rise of Airline Loyalty Programs: Airline loyalty programs have become increasingly popular over the past few years, and this trend is likely to continue. AAG will need to continue to invest in its loyalty program in order to remain competitive and offer incentives to customers.

Key Performance Indicators

Below is a list of KPI's that we have identified as being strategically relevant to this organisation:

Financials (BETA)

The key financials for American Airlines Group include income statements, which can be found in their annual reports. These financial statements provide information on the organisation's financial performance and health, including revenue, expenses, and profits. This information, along with other indicators are used by investors, analysts and other stakeholders to evaluate the company's performance and future prospects.

Where a financial does not match, we have included those of the parent company (if a listed entity). If the financials are missing please contact us and we will prioritise the update.

Key Personnel

Income Statement

[eod_financials target="AAL.US" id="10329343" preset="Income Statement" years="2018-2023"]

Highlights

Top-level corporate stats and financial highlights for the listed entity, include:

Share Performance

Below is the current (EOD) share performance for the company, or its listed parent:

Potential Products/Services

As part of this study we have attempted to prognosticate potential products and/or services this organisation could develop in the short to medium-term.

Travel Insurance: American Airlines Group could create a travel insurance product that provides travelers with coverage for medical and financial losses related to their travel experience.

Airport Lounge Access: American Airlines Group could offer a membership program that allows customers to access airport lounges around the world.

Airline Credit Card: American Airlines Group could create a branded credit card that gives customers bonus points and discounts when they purchase tickets with American Airlines.

Loyalty Program: American Airlines Group could create a loyalty program that rewards customers with points and discounts when they fly or purchase products from American Airlines.

Free Wi-Fi: American Airlines Group could offer free Wi-Fi on select flights, allowing customers to stay connected while traveling.

Airport Concierge Services: American Airlines Group could offer concierge services to customers at select airports, providing assistance with check-in, baggage, and other services.

Online Check-In: American Airlines Group could provide customers with the ability to check-in and select their seats online, allowing for a more convenient and efficient travel experience.

Flight Tracking App: American Airlines Group could create a flight tracking app that allows customers to easily track the status of their flight in real-time.

Flight Status Alerts: American Airlines Group could provide customers with the ability to receive flight status alerts via email or text

Potential Synergies

Using our product and portfolio-matching algorithm, we have determined that the following organisations have potential synergies with the company:

1. Boeing
2. Delta Air Lines
3. Marriott International
4. JetBlue Airways
5. United Airlines
6. Southwest Airlines
7. American Express
8. Hilton Worldwide
9. Avis Budget Group
10. Hertz Corporation

Porter's Five Forces

Created by Harvard Business School Professor Michael Porter in 1979, Porter's Five Forces model is designed to help analyse the particular attractiveness of an industry; evaluate investment options; and better assess the competitive environment.

The five forces are as follows:

Competitive rivalry
Supplier power
Buyer power
Threat of substitution
Threat of new entries

The Porters 5 forces are:

1. Threat of new entrants- American Airlines Group scores HIGH in this category as the barriers to entry in the airline industry are very high.

2. Threat of substitute products- American Airlines Group scores HIGH in this category as WELL as there are no close substitutes for air travel.

3. Bargaining power of suppliers- American Airlines Group scores HIGH in this category as the suppliers (aircraft manufacturers) have very little bargaining power.

4. Bargaining power of buyers- American Airlines Group scores HIGH in this category as buyers (consumers) have very little bargaining power.

5. Intensity of competitive rivalry- American Airlines Group scores HIGH in this category as the airline industry is very competitive.

PESTLE Analysis

This PESTLE analysis is a strategic planning tool that assesses key external factors affecting the organisation, including the following:

Political
Economic
Social
Technological
Legal
Environmental

Each of these factors is analysed to determine their impact on the organisations strategy, objectives, and operations.

By utilising a PESTLE analysis, the organisation can make better decisions and develop strategies to address potential risks and opportunities.

CATWOE Analysis

The CATWOE analysis is used to investigate each stakeholders perspectives in order to enable the business to make informed decisions.

The CATWOE analysis is a problem-solving tool consisting of six elements:

Customers
Actors
Transformation process
World view
Owners
Environmental constraints

We view the CATWOE as being most useful when used in conjunction with other problem-solving tools such as a SWOT analysis.

Customers: The customers of American Airlines Group are airline passengers, cargo shippers, and other companies that provide services to support the airline industry (e.g. maintenance services, catering, etc.).

Actors: The main actors in American Airlines Group are the airline pilots, flight attendants, ground crew, and other personnel who support the operations of the company. The management team, shareholders, and other stakeholders also have an important role in the company's operations.

Transformation process: American Airlines Group’s transformation process is targeted at providing safe, efficient, and reliable air transportation services to its customers. The company strives to continually improve the customer experience and to maintain a competitive edge in the airline industry.

World view: American Airlines Group is committed to providing quality air transportation services to its customers and creating a positive workplace for its employees. The company seeks to maximize its profits while also aiming to be a responsible corporate citizen and actively contribute to the communities it serves.

Owners: The owners of American Airlines Group are the company’s shareholders, who are primarily composed of institutional investors.

Environmental constraints: American Airlines Group is subject to a variety of environmental regulations and constraints, such as safety standards and emissions requirements. The company must also comply with labour laws and other regulations related to the airline industry. The fluctuating prices of fuel and other commodities also have a major impact on the company’s operations.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the American Airlines Group business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

Strengths

Below is a list of the strengths we have identified for the business:

1. American Airlines Group has a large global network, with over 6,700 daily flights to nearly 350 destinations in more than 50 countries.

2. American Airlines Group has a strong brand and is the world's largest airline by revenue.

3. American Airlines Group has a strong financial position, with over $20 billion in cash and investments as of December 31, 2016.

4. American Airlines Group has a experienced management team, led by CEO Doug Parker, who has been with the company since 2013.

Opportunities

Below is a list of opportunities we have identified for the business:

1. Invest in innovative customer service technologies: American Airlines Group should continue to invest in customer service technologies to improve the customer experience and enhance customer loyalty. This could include utilizing artificial intelligence to streamline customer service inquiries, developing an online platform for customers to check in and manage their flights, and providing digital boarding passes that can be accessed through a mobile app.

2. Leverage data to increase operational efficiency: American Airlines Group should leverage data and analytics to better understand customer preferences and trends, allowing them to adjust their operations to meet customer needs. This could include using customer data to improve flight schedules, optimize aircrew rosters, and identify areas of improvement for customer service.

3. Expand international presence: American Airlines Group should consider expanding their international presence, targeting new markets and increasing their global reach. This could include establishing new routes in emerging markets, developing new partnerships with international carriers, and increasing marketing efforts in international markets.

4. Invest in modern aircraft: American Airlines Group should invest in modern aircraft to ensure customer safety and comfort. This could include replacing aging aircraft with more fuel-efficient models, introducing aircraft that are equipped with the latest technology, and implementing regular maintenance and inspections to ensure the highest levels of safety.

Weaknesses

Below is a list of the weaknesses we have identified for the business:

1. American Airlines Group has been struggling to keep up with its competitors in terms of innovation and customer service.

2. The company has been lagging behind in terms of profitability, with its margins being squeezed by aggressive competition.

3. American Airlines Group has a large debt burden, which has been a drag on its financial performance.

4. The company has been facing challenges in terms of its labour costs, with its unions demanding higher wages and benefits.

Threats

Below is a list of the threats we have identified for the business:

1. Rising fuel prices: As fuel is the single largest cost component for airlines, any increase in fuel prices significantly affects the profitability of American Airlines Group.

2. Increased competition: American Airlines Group faces intense competition from other airlines, both domestically and internationally. This competition can lead to lower fares, reduced capacity, and fewer routes.

3. labour management issues: American Airlines Group has faced a number of labour disputes in recent years, which have resulted in costly litigation and strikes. These disputes can lead to an increase in labour costs and a decrease in customer satisfaction.

4. Technological disruptions: Technological disruptions such as the emergence of low-cost carriers, the emergence of new technologies, and the shift to mobile platforms can significantly affect the way customers interact with American Airlines Group, which can lead to a decrease in revenue.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for American Airlines Group. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to American Airlines Group, as well as areas where the company needs to improve its operations or strategy.

Company: American Airlines Group is the world’s largest commercial airline, operating more than 6,700 flights every day. It serves over 350 destinations in 50 countries, and has a network of over 1,000 daily flights.

Collaborators: American Airlines Group has strategic partnerships with other major airlines such as British Airways, Qantas, and Cathay Pacific. It also has a number of codeshare agreements with other carriers, allowing for greater access to international destinations.

Customers: American Airlines Group serves a wide range of customers, from business travelers to leisure travelers and families. It offers a variety of services and amenities to meet the needs of all its customers.

Competitors: American Airlines Group is the largest commercial airline in the world, and it faces competition from other major carriers such as United Airlines, Delta Air Lines, and Southwest Airlines.

Content: American Airlines Group offers a variety of content and services, including online booking, flight information, airport services, and more. It also provides a range of loyalty programs, such as its AAdvantage program, and special offers for frequent travelers.

MOST Analysis

The MOST analysis framework is commonly used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. This analysis helps organisations to focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles that may arise along the way.

Mission
Objectives
Strategy
Tactics

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

As part of our research and analysis activity, the team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism.

First, we allocate a score of A-E for the industry vertical, gauged on the key organisations operating within the space; and then score the individual business using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant into the marketplace; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that in the view of the analysis team it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Industry score:

A	The industry is amongst the most innovative; with the leading players all driving the sector forward. Example industry: PaaS
B	The industry and its leading players have a good track record of innovation; and can quickly react to change. Example industry: Pharmaceutical
C	Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate. Example industry: FMCG
D	Businesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption. Example industry: Retail Banking
E	The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change. Example industry: Publishing

Company score:

1	The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2	The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3	The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4	The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5	The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.

The team at Platform Executive has judged American Airlines Group as having an innovation score of D3.

Appendices

The appendices section of this report contains supplementary information that the team at Platform Executive deems helpful in providing a more comprehensive understanding of the report's contents.

This information is not considered an essential part of the study but serves as a useful supplement to the main text.

Methodology

This study on American Airlines Group forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The information and data included are updated on a timely schedule to ensure that our Premium members receive the most up to date information .

The report is based on information and learning from the following sources:

Corporate websites
Proprietary research databases
SEC Filings
Corporate press releases
News articles
Financial data API's
Product-matching algorithm

Further Information

Premium members: If you cannot find the desired information or data set for the business you are researching then please reach out to our research and analysis team. We can tailor reports to meet your requiremnents, with a fast turnaround time.

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Disclaimer

Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Changelog

Premium members: To request a priority update to this report, please contact us. Our standard turnaround time is normally 48 hours.

The changelog for this report can be found below, complete with the next scheduled update:

v1.1: Initial load of report
Date: 1st March 2023

Key Financials added (BETA)
Date: 17th March 2023

Next scheduled update: 29th May 2023

Industry Keywords

Related keywords:

Air Transportation Fleet Hubs Routes

Henkel

International Paper