American Airlines Financial Ratio

Topics: Financial ratio, Financial ratios, American Airlines / Pages: 8 (1781 words) / Published: Nov 9th, 2012
Summary of the Company American Airlines, Inc. (American) was founded in 1934 and is the principal subsidiary of AMR Corporation. American provides aircraft services to around 160 destinations around the world. American Airlines has connections to 3 regional carriers. Two carriers are owned by AMR (American Eagle and Executive Airlines). The third carrier is owned by a third party (Republic Airways Holdings) that has no connection to AMR. These regional carriers serve to connect feed from major hubs to smaller regional airports that do not have international service. The major hubs for American are Dallas/Fort Worth, Chicago O’Hare, New York City (JFK), Miami and Los Angeles.

Recent Events In late 2009, American released a new business plan called FlightPlan 2020. This plan is aimed at helping the company continuously earn profits in the next decade. By establishing the priorities of American, the plan is designed to help the company strategize for the future. Between 2008 and 2010, American entered into a joint business agreement (JBA) with British Airways, Iberia, Finnair, Royal Jordanian, and JAL. In order to enter into a JBA, American applied and was granted permission for antitrust immunity. The reasons for entering a JBA include expand their route network through codesharing, share revenues and cost, and to boost commercial cooperation. In late 2011, AMR filed for Chapter 11 bankruptcy protection to reorganize its business. American’s parent company hopes to reduce debt and mounting costs by restructuring the company. Although its parent company has filed for bankruptcy protection, American stated that it will continue to operate normally at least in the foreseeable future.

Company Strengths Three company strengths that are important to American’s operations are its inclusion in an airline alliance, its extensive air cargo network, and its large presence in the Latin American market. American is a part of an airline alliance

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