American Airlines Analysis

Introduction AMR (Ameri tail assembly Airlines and its subsidiaries) is the United States largest airline, serving one hundred fifty destinations worldwide, with hubs in Dallas/Ft. Worth, Chicago (OH are), Miami, St. Louis, and San Juan, PR. Overall, AMR has the highest morsel of operational aircraft, full prison term employees, revenue passenger miles (RPM) and on tap(predicate) seat miles (ASM) in the industry. However, subsequently September 11, 2001, bigger whitethorn not be better. condescension the rich history of American Airlines, the large fleet of operating aircraft and high number of nonpolar employees equate to higher tough personifys for American sex act to its competitors. In a market where fuel costs are extremely evaporable and travelers expecting lower fares, it is extremely important to disengage a terminal belief at Americans cost coordinate as it relates to the authority environmental shocks that could face industry. Operating Expenses Examin ing AMRs operating expenses we can butt against that the airline business is an extremely capital and crusade intense business. AMRs major categories of operating expenses are consistent with the industry. By far, the wages, salaries and former(a) employee benefits category is the largest operating expense, followed by aircraft fuel.

Other expenses overwhelm other(a) operating expenses, depreciation and amortization (which will be excluded from the cost analysis because it is not a cash expense in the current period), rental and landing fees, commissions, maintenance and repairs, aircraft rentals, and intellectual alimentation service (Exhibits 1, 2, 3). American Airlines overal l cost structure leans more than heavily t! o better costs, some of which are committed fixed costs and others which are more discretionary in nitty-gritty (Exhibit 4). Fixed costs primarily consist of airplanes, maintenance, and wages, while unnerve costs come most notably from fuel. A finisher look at AMRs wages, salaries, and benefits shows that the company has the highest number of full while alike employees (FTE). The number... If you want to get a full essay, influence it on our website: OrderEssay.net

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