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 which was launched by 13 of the world’s leading airlines and a connect partner. It has 24 affiliate airlines that are linked with the full members (Oneworld, 2023).
American Airlines, together with its regional partner American Eagle, offers thousands flights a day to 350 destinations in more than 60 countries. Its parent company’s name is American Airlines Group (American Airlines, 2023).
AAdvantage is the loyalty programme of American Airlines. As AAdvantage members, passengers can earn miles when they fly with American, oneworld® and other participating airlines, as well as over 1,000 partners (American Airlines, 2023). They can then use the miles in a number of ways.
For example, members 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.
American Airlines boasts a diverse fleet. With a variety of airplanes in its fleet, it can accommodate different passenger capacities, flight ranges, and customer preferences. This diverse fleet also allows it to optimise fuel consumption and lower operational costs.
Financial position of the American Airlines is also an important aspect to consider in this analysis. The company has produced revenues of $12.2 billion in the first quarter of 2023 which represents a 37% increase year over year (American Airlines, 2023).
Weaknesses of American Airlines
American Airlines has been accused of discrimination and disrespectful behaviour. In the past, NAACP issued an unusual warning to African Americans informing that they could face disrespectful behaviour and discrimination if they fly on American Airlines. 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.
Dharsi (2023) reports that American Airlines has been accused of discrimination again recently. Two black passengers including a celebrity were removed from the place over issues such as the size of the luggage (which was cleared at the gate as claimed by the passenger), and argument with the flight attendant.
There are some other problems American Airlines experienced recently. For example, few years back, the airline had a technical problem with its pilot scheduling system. Its computer system accepted time off request from any pilot who wanted it regardless of whether the pilot deserved it. 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).
American Airlines also faces challenges with customer service. While it has made efforts to improve customer experience, there are still frequent complaints about delayed flights, lost luggage, and poor in-flight services. These issues can damage its reputation and customer satisfaction levels.
Opportunities for American Airlines
American Airlines has more expansion opportunities than many other airlines. It has opportunities to introduce more routes to its domestic and international markets. For example, it can grow further by using Charlotte’s airport which is its second-largest hub. Demand for its services such as domestic and short-haul international flights remains strong.
Moreover, the increasing focus on sustainability presents another opportunity for American Airlines. By investing in fuel-efficient aircraft and adopting sustainable practices, it can reduce its environmental footprint, meet regulatory requirements, and attract environmentally conscious customers.
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 disasters always affect the air travel and airport infrastructure. Fire, earthquakes, tornados, and floods can severely impact on airports and aviation facilities. They can easily cause flight delays, cancellations, and other disruptions.
Another significant threat is the volatility of fuel prices. As fuel is a major operational cost for airlines, fluctuations in prices can have a significant impact on American Airline’s profitability. Furthermore, security concerns pose another threat to the aviation industry.
Conclusion: SWOT analysis of American Airlines
This detailed analysis illustrates American Airlines’ robust strengths, its notable weaknesses, the promising opportunities before it, and the significant threats it faces. By leveraging its strengths and opportunities efficiently, it can overcome its weaknesses and navigate its threats.
We hope this article on the ‘SWOT analysis of American Airlines’ has been useful. You may also like reading SWOT analysis of Air Canada. Other relevant articles you may be interested in are:
Last Update: 16 June 2023
American Airlines (2023) American Airlines Group, available at: https://www.aa.com/i18n/customer-service/about-us/american-airlines-group.jsp (Accessed 16 June 2023)
Dharsi, N. (2023) American Airlines accused of discrimination, again, available at: https://www.axios.com/local/dallas/2023/01/25/american-airlines-discrimination-allegations (accessed 14 June 2023)
Oneworld (2023) About the oneworld alliance, available at: https://www.oneworld.com/about-the-oneworld-alliance (accessed 15 June 2023)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.