Marketing Strategy of American Airlines – American Airlines Marketing Strategy: Since its inception in 1930, American Airlines is the world’s largest airline. Its revenue, number of destinations served and fleet size, as well as Scheduled passenger kilometers, have made it the most successful Airline worldwide. AMR Corporation, American Airlines’ parent company filed for bankruptcy protection in 2011, due to the decline in the airline industry. US Airways and American Airlines were combined under the brand in 2013 to create the largest United States airline.
American Airlines At A Glance – Marketing Strategy of American Airlines
Company : American Airlines, Inc.
CEO: Doug Parker
Founder: Avco Corporation
Year founded: June 25, 1936
Headquarters: 4333 Amon Carter Blvd Fort Worth, TX 76155 United States
Annual Revenue: USD$9.4 Billion
Profit | Net income: USD$1.3 Billion
Number of employees : 130,000
Products & Services: Air transport, travel | Financial services
American Airlines Competitors
American Airlines Fun Facts: According to Wikipedia, on April 6, 2018, adding to its previous order for 42, American has ordered an additional 47 Boeing 787 which includes 22 787-8 and 25 787-9, for over $12 billion at list prices.
Marketing Strategy of American Airlines
American Airlines’s Marketing Strategy covers various aspects of the business right from segmentation and targeting to the overall mission and vision of the company and the various parameters which the company executes to become the top brand that it has in the market. So what is the Marketing Strategy of American Airlines? Let us discuss.
Segmentation, Targeting, Positioning – American Airlines Marketing Strategy
American Alliance employs a combination of demographic and geographical variables to provide customer service. Segmentation allows you to understand the different customer groups based on distinct population variables.
To meet the increasing requirements of customers around the world, it uses an undifferentiated Targeting Strategy.
The group was formed in repositioning in the wake of the 2008 global crisis and the 2013 merger of US airlines to create a larger Aviation entity. To create a mental map of customers’ minds, it uses a user benefit-based positioning strategy.
American Airlines Mission Statement
“To do trustworthy things for the team, who in turn will continue to take great care of the customers who count on American Airlines”
American Airlines Vision Statement
American Airlines Tagline
“The World’s Greatest Flyers Fly American”
Competitive Advantage – Marketing Strategy of American Airlines
Strong Domestic Presence: American Airlines has generated more than 60% of its revenue through domestic routes. Over 55 million passengers travel on planes of regional carriers, 44% of which connect to mainline flights of America Airlines. 26 million people are estimated to be among these passengers. 26 million and 28 million respectively were enplaned on wholly-owned regional airlines and third-party regional airlines.
Oneworld Alliance: American Airlines was founded by the third-largest Airline Alliance in the world, “Oneworld”, and its members-elect. They serve more than 1,050 destinations and offer more than 14,000 daily flights to 150+ international countries.
The Passenger Business: More than 70% of American Airlines’ revenue comes from this business, which accounts for 87% of American Airlines’ revenues.
BCG Matrix – American Airlines Marketing Strategy
American Airlines has three Strategic Business Units ( SBU), i.e. Mainline Passenger, Regional, and Cargo segments.
Because Mainline passenger business segments account for more than 69% of operating revenue, it is Stars in the BCG matrix. Other segments are question marks within the BCG matrix.
Distribution Strategy – Marketing Strategy of American Airlines
It has a large domestic network that flies to over 360 destinations in more than 50 countries. This includes hubs like Dallas/Fort Worth and Philadelphia, Chicago, Washington D.C. Los Angeles, Phoenix, and Miami.
It operated 930 mainline aircraft, and 606 regional aircraft through its regional airline subsidiaries and third-party regional carriers in 2016.
Brand equity – American Airlines Marketing Strategy
American Airlines was ranked 247 on Forbes magazine’s list of global 2000 brands, and 67 on Fortune 500 (as of May 2017). According to the market capitalization method, the brand is valued at $ 21.1 Billion and generates revenue of $40.18 Billion.
Competitive Analysis – American Airlines Marketing Strategy
It faces competition from many airlines on its domestic non-stop flights, including United Airlines and Frontier Airlines, Hawaiian Airlines, United Airlines and Frontier Airlines, Alaska Airlines, and Alaska Airlines.
It competes in the cargo segment with charter and cargo airlines, as well as other modes of transport such as Road/ Ground or rail transports.
The industry is so competitive that price discounts on a market-to-market basis, targeted promotional, fare matching, and changes in the pricing structure, as well as loyalty program initiatives, can have a significant impact on the customers’ choices.
Market Analysis – Marketing Strategy of American Airlines
The Aviation industry is dominated by national, regional, and international players. There are many constraints in the market, including unsold inventory, low airfare, low-cost carriers like Southwest Airlines, price wars, regional frequency, and rising fuel costs. Government regulations also create high barriers to entry for companies.
Customer Analysis – American Airlines Marketing Strategy
American Airlines customers are corporate clients who require cargo transport services and passengers who wish to travel to distant locations in the US.
Retail customers are further sub-divided by American Airlines into Mainline Passengers and Regional Passengers.
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