American Airlines, Inc. is the third largest airline in respect to operating revenues as well as in passenger miles transported (Capozzi, 2001). Headquartered in Fort Worth, Texas, AA (American Airlines) operates an extensive domestic and international network, a factor that has enormously contributed to brand awareness among the customers (Reed, 1993). Wikinvest (2012) the net income of the firm rose by $1 billion to $ 470 million in loss in 2011 as compared to 2010 (Forty, 2007).
As at February 17, 2012, the prevailing share price of AA at the NYSE was $ 0.51, with the total number of shares traded being 3,121,989 (Wikinvest, 2012). With a market share of 32.1% in the U.S. and annual sales revenue of $22.16 billion, Kawai (2011) attributes the recent growth of AA, domestically and internationally, to the firms’ effort to lower operational costs, hence offer reduced fare prices to its customers. Further, it is notable that due to the firm’s growth and expansion strategies, AA was listed at position 120 on the Fortune 500 list in 2010, hence raising investor’s confidence (Rushe, 2011).
As a result of reduced profitability of the firm over the last three years highly attributable to the recent global recession, AA has started to promote its products and services using social media, such as Twitter, Facebook, blogs and MySpace, which are becoming popular, especially among the younger generations globally. This way AA has been able to gain an advanced competitive edge over its rivals, such as Delta Airlines, South West airlines among others (Bedwell, 2009).
Currently, AA is negotiating with airline makers Boeing Company, to enable the firm to replace all its domestic fleets with A320 Airbus, which is more environmentally friendly in comparison to the current airplanes being used (Rushe, 2011). In conclusion, AA is one of the successful airline companies in the 21st century, despite the reduced profitability levels.