The American Airline is considered as the major airline in the United States. Its’ headquarter is located in Texas, Fort Worth. American airline is considered as the largest airline of the world in terms of fleet size, scheduled passenger flown, served destinations numbers and revenues. American airline and regional partners worked hard for the success of the company and operates both domestic and international networks, with 6700 flights on average per day to more than 350 destinations in 50 countries (American airline, 2017).
In 1934, American airline has started its operations. In the beginning, there were no such competitions, and it was able to maintain its monopoly till 1978, after which rules of Airline act came into existence, and it changed the America’s airline industry. Because of this act, many competitors arrived in the market, and American airline needed to revise its strategies for effectively competing in the market. American airline gained its competitive advantage afterwards, because it was the first one to introduce the online reservation services and online ticketing system. It has provided the availability of the internet as the marketing tool and ticket shopping. There have been many new companies like Expedia, Cheap tickets and other ticketing, shopping services, to compete with them American airline collaborate with them and introduced new services so that customers prefer it over other alternatives (Wagenen, 2015).
American airline worked hard on its innovative strategies. Their research and development department suggested them two tier system for wages. It’s believed that starting the wage system on the low tier basis would be beneficial for the company, because there was no competitors who worked on this. This means that its existing employees will be on higher tier and higher wages were set according to the union contract’s requirements. It was suggested that their starting salaries could be less up to 50% with an intention to compete with new companies’ in the airline industry (CAPA, 2015).
American Airline introduces the online reservation system for the first time industry and this has helped it in gaining a competitive edge over its competitors with the name of SABRE, and it was able to capture the highest market share of 40%. It was the first one to introduce the first program for frequent fliers, there were many competitors who tried to copy this concept, but still were not able to organize it on the bigger level and did not grab that much attention. It was the biggest achievement of the American airline. The reward was free tickets for members, and by this point system was evolved, where all products listed in catalogs were offered (CAPA, 2015).
American airline does not have that much competitive advantage, and because of their sustainability issues, they have to revise their policies, but it is consistent with pioneering technology, innovation, marketing campaigns, and unique ideas, and it also uses its alliances for competitive strategies.
References
American airline, 2017. About us. [Online], Available at: https://www.aa.com/homePage.do?locale=en_US, [Accessed on: 14th December, 2017].
CAPA, 2015. Operational excellence becomes a competitive force for American Airlines, Delta and United, [Online], Available at: https://centreforaviation.com/insights/analysis/operational-excellence-becomes-a-competitive-force-for-american-airlines-delta-and-united-252064, [Accessed on: 14th December, 2017].
Wagenen, J. 2015. American Airline claims Competitive edge in youthful fleet. [Online], Available at: http://www.aviationtoday.com/2015/12/04/american-airlines-claims-competitive-edge-in-youthful-fleet/, [Accessed on: 14th December, 2017].