Strategic Analysis of American Airlines Group Inc. 2023 Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Understand the broad macro-environment and micro-environment of American Airlines Group Inc. with a focus on the challenges it is faced with
- Evaluate American Airlines’ business environment in order to identify key issues, risks, and opportunities and how they affect its operations and strategic position in a market, using concepts such as PESTLE, SWOT, Porter's Five Forces, VRIO, and generic competitive strategies.
- Understand the concept of a strategy analysis and how to apply it to a real case study company.
1.0 INTRODUCTION
American Airlines is a US-based airline serving in over 50 destinations worldwide with 6,700 daily flights.
Founded in 1934, American Airlines Group was initially named American Airways and it has undergone a number of mergers and acquisitions in order to become one of the leading airlines in the world. The company operates under its wholly-owned subsidiaries namely American Airlines, Inc., Envoy Aviation Group Inc., PSA Airlines, Inc., and Piedmont Airlines, Inc. The company has its headquarters in Skyview Drive, Texas. AAG’s primary business activity is the operation of a major network air carrier, offering scheduled air transportation for passengers and cargo.
As of March 31, 2023, the company had raised a total operating revenue of $12,189 million. The company raised an annual revenue of $48,971 million in 2022 which was an increase compared to that of 2021 which was $29,882 million.
This report uses the case study of American Airlines to examine the macro and micro environmental changes in its market. The study will use frameworks such as PESTLE, SWOT, Porter's Five Forces, VRIO, and generic competitive strategies. The report will undertake a strategic overview of American Airlines, including its financial performance, competitive microenvironment, competitive advantage, technological improvement, pricing strategy, and many others.
Key questions to answer include; what is American Airlines’ current strategy? What are the strengths of American Airlines? What are American Airlines’ major weaknesses? What are the macro and micro factors affecting American Airlines? Who are the competitors of American Airlines? What is the competitive strategy of American Airlines?
The report will conclude with suggestions and a discussion of strategies and tactics that could be used by American Airlines to respond to the major changes occurring in the airline market.