American Airlines Essay Example for Free

American Airlines EssaySituational abbreviationInternal factorsStrengthsJoint Venture with Japanese AirlinePartnership with JetBlueMember of oneworld allianceInternational wing to North America, the Caribbean, South America, Europe and Asia Number of routesAAdvantage frequent flyer programWeaknessesOlder airplanesUnstable chairs on their airplanesCurrent financial situationExternal factorsOpportunitiesMerge with another airlineReorganization of their company self-made retrenchment strategyIncrease profitsUpdate planesPurchase new aircraftsSatisfy consumer unavoidablenesssThreats connection filed for bankruptcy in November 2011Competition with competitors low cost strategyPrice of fuel has ontogenesisd wear out costs have increasedUS economic slowdownProblem American Airlines is struggling with higher(prenominal) costs, mainly, higher fuel costs and labor costs. These costs became so excessive, that AmericanAirlines had to declare bankruptcy. alternating(a) 1 American Airli nes needs to emerge from bankruptcy as a profitable company, which would enable them to explore the accident of a merger with another airline provided that the two airlines combined would provide efficiencies and higher profitability.StrengthsPotential increase in profitsOpportunity to eliminate duplicate costsPotential to enhance brand actualization because now they will have more routes and more to offerWeaknessesAlways potential for disruption and disarrangement as the merger takes place The cost of the merger (usually underestimated)Miscalculation of the difficulties of merging two corporate cultures election 2 They must use the bankruptcy process to light their labor cost, both by charter concessions and more efficient work roles. StrengthsLower costsMore efficiency of workersPotential increase in profitsLead to lower flying inconveniencesHelp exit bankruptcyWeaknessesResistance from the employeesDisruptions could cause cancelationsAlternative 3 Use the bankruptcy to lowe r other employee costs such as medical indemnity and pension. StrengthsLower labor costsHelp exit bankruptcyDecrease debtWeaknessesResistance by employees give out relationships among employers and employeesRecommendationMy recommendation would be alternative two They must use the bankruptcy process to lower their labor cost, both by enlist concessions and more efficient work roles. Im assume that this alternative will lower costs the most. American Airlines needs to use the bankruptcy process to use this alternative effectively. They need to go before the bankruptcy court asking them to cooperate to seek wage concessions and more efficient work roles.A combination of the legal department and the finance department need to be in charge of implementing this alternative. This is a legal matter but the finance department must explain to the legal department what is needed in terms of financial relief. This needs to be utilise as soon as possible. It must start in the bankruptcy co urt. This can be evaluated by examining if this alternative does lower cost without completely destroying employee to employer relationships. The finance department needs to evaluate their financial metrical composition (examining costs) on a monthly basis.