American Airlines Competitive Advantage: Report Example

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Updated: Oct 31st, 2023

Executive Summary

The aim of American Airlines is to ensure paramount comfort and security of passengers, suitable handling of their belongings, first-rate services, and a competitive advantage with striking offers. The company has set its services apart from its competitors by establishing ways of guaranteeing the highest benefits, effortless booking, and a remarkable experience. American Airlines competes on service, and this has resulted in the creation of online booking, web sites, social media platforms, and the biggest fleet size. Its preference for a high number of customers has made it realize a top position in the industry.

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American Airlines (AA) Company, often called American, denotes an airline that has its head office in Texas. The company, together with its regional partners, caters for extensive global and local travels with no less than 7,000 flights each day, in over 300 destinations (Hannigan, Hamilton III, & Mudambi, 2015). It acts as the leading airline internationally with respect to fleet size, annual proceeds, and distance covered, and the second when judged against the number of terminuses served.

The Company and its Goods/Services

The objective of American Airlines is to ensure the utmost comfort and safety of passengers in the course of flight, proper handling of their property, outstanding experience, and a competitive benefit with attractive charges. AA established OneWorld Alliance, one of the largest airline groups across the globe, to manage the costs, services, and required plans with its joint collaborators. The largest passenger transporting spot in the US for American Airlines is Dallas International Airport, which handles more than 50 million passengers each year and approximately 150,000 daily. Moreover, American Airlines has over 100,000 workers.

American Airlines Strategy: Upholding Competitive Benefit

American is facing aggressive rivalry from other airlines that undertake travels to international destinations. The most powerful competitors of AA include Delta Air Lines, United Continental Holdings, Southwest Airlines Company, and JetBlue Airways (Thomas & Kummer, 2015). American Airlines sets its services apart from its competitors by coming up with strategies of guaranteeing maximum benefits, easy booking, and impressive experience. The company competes on service, which has led to the establishment of online booking, web sites, and big fleet size. In this regard, American Airlines has much to gain from its competitive advantage since its preference by a huge number of passengers has made it scoop a leading position in the sector. The competitors of American Airlines have fewer travel destinations, and this gives it an opportunity of earning a higher income.

As a means of setting apart its services and competing successfully, American Airlines has commenced operations in five hubs, loads and passengers transfer locations, which are strategically positioned to draw a huge number of passengers. The hubs are set in the busiest metropolis in America and encompass John F. Kennedy International Airport and Dallas International Airport to mention a few (Hannigan et al., 2015). In May 1981, American Airlines established a loyalty plan deemed the AAdvantage. This program has been extremely successful and has managed to acquire over 70 million members with regard to recent records. Under the program, regular travelers obtain a reward that is proportional to their rate of booking and the cost incurred for the trips.

In AA, the customers are arranged in terms of a set criterion to allow everyone to benefit. The different groups encompass AAdvantage Executive Platinum, AAdvantage Gold, AAdvantage Standard, and AAdvantage Platinum. AAdvantage card possessors obtain benefits that entail low-priced vehicle rentals, trip redemptions, and stays in hotels at no cost. The customers get such benefits after using AA and its partners such as OneWorld and British Airways (Thomas & Kummer, 2015). AAdvantage Standard targets the low-income group, in addition to the ones who do not travel frequently. By the AAdvantage Executive Platinum attracting the wealthy passengers and those who travel regularly, it plays a vital role in enabling the company to enjoy a considerable market share in times that the situation in the market is not favorable for business. Similar to the case of the other loyalty plans, the AAdvantage Gold and AAdvantage Platinum offer attractive benefits for the customers, therefore, making it appear unreasonable for them to switch loyalty to the competitors. Passengers find it difficult to choose a different company as they desire to accumulate bonus points on AA’s loyalty program, which translates to higher benefits.

American Airlines Customer Services & Communication

American Airlines ensures constant communication with its customers and would-be clients by providing constant updates and timely response to their queries through its web site and other platforms (Min & Min, 2015). Twitter, Facebook, and Instagram have made it simple for the company to keep in touch with its customers globally over and above making online bookings through computers and smartphones easier and more comfortable. Through its constant updates on social media platforms, AA ensures that all customers are familiar with the loyalty program and other services meant to enhance its success. Moreover, the company incorporates the views and demands of the customers raised through social media and other means of interaction in its development initiatives to ensure that it continues to serve them even better while upholding their loyalty. American Airlines’ customer communication and social media endeavors convey its competitive advantages by offering a wide reach, making the clients aware of new matters, and validating the company’s credibility. Customer communication and use of social media aid in the promotion of both American Airlines and its travel destinations by raising the awareness of the customers and attracting would-be clients.

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American Airlines Competitive Advantage: Conclusion

American Airlines together with its local collaborators caters to global and local travels with about seven hundred flights each day, in over three hundred destinations. To maintain its tremendous success, American Airlines started a loyalty plan deemed the AAdvantage. The strategy has been very successful and has drawn over 70 million customers. Constant communication and use of Twitter, Facebook, and Instagram have made it simple for AA to keep in touch with its clients worldwide, in addition to making online booking easier and more comfortable.

References

Hannigan, T. J., Hamilton III, R. D., & Mudambi, R. (2015). Competition and competitiveness in the US airline industry. Competitiveness Review, 25(2), 134-155.

Min, H., & Min, H. (2015). Benchmarking the service quality of airlines in the United States: An exploratory analysis. Benchmarking: An International Journal, 22(5), 734-751.

Thomas, M., & Kummer, C. B. (2015). M & As in the airline industry: Emotions flying high. Strategic Direction, 31(8), 17-19.

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IvyPanda. (2023) 'American Airlines Competitive Advantage: Report Example'. 31 October.

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IvyPanda. 2023. "American Airlines Competitive Advantage: Report Example." October 31, 2023. https://ivypanda.com/essays/american-airlines-and-its-competitive-advantage/.

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