I.

Introduction

AMR Corporation is a holding company that was created in 1982 when its newly elected
President, Robert Crandall, saw access to sources of financing without affecting the operations
if the business will be a holding company. Even though AMR was created in 1982, its wholly
owned subsidiary, American Airlines, has been operating since 1926 after the merger of small
airline companies. One of these founding enterprises was the Robertson Aircraft Company of
Missouri, which employed Charles Lindbergh who flew the first American Airlines flight
carrying U.S. mail from St. Louis, Missouri, to Chicago, Illinois in 1926. After 8 years,
American Airlines, with the help of Donald Douglas, an aircraft manufacturer, developed DC-
3, a 21-passenger airplane that made the company ranked as number one airline company by
the end of the decade. Since then American Airlines became one of the world’s largest airline
that helped define the full-service airline, pioneering computer reservation systems, frequent-
flier miles, coast-to-coast jet flights, the hub-and-spoke system, and advance-purchase discount
fares.

II. Strengths and Weaknesses

A. Strengths
GLOBAL NETWORK

AMR Corporation has a strong alliance with different international associations. AMR is one
of the founding members of Oneworld Alliance in September 1998 along with British Airways,
Canadian Airlines, Hong Kong’s Cathay Pacific Airways, and Australia’s Qantas Airways.
This allowed the corporation to link with its partners’ frequent-flier programs and have access
to different airport lounge facilities. This increased the flight frequencies of AMR together with
other members of the alliance. Through the alliance the members were able to reach around
1000 destinations in approximately 150 countries.

FREQUENT FLYER PROGRAM

Frequent flyer program of AMR is known as AAdvantage Program. It was first introduced on
May 1, 1981 which was the first ever flyer program. It was awarded as Outstanding Benefit in
Americas category at the FlyerTalk Awards in 2012. The members of the program can earn
mileage credits from more than 1000 participating companies which includes hotels, airlines,
rental companies, etc. This program encourages customers to repurchase and build strong brand
loyalty towards the company. Aside from customer loyalty, according to Kanchan Sharma
(2017) “adding a small percentage of the truly high-value customers can add millions in
incremental revenue for airlines”. As of December 31, 2011 AAdvantage had approximately
69 million total members, and 591 billion outstanding award miles. During 2011, AAdvantage
issued approximately 167 billion miles, of which approximately 65%% were sold to program
participants

STRONG BRAND IMAGE

AMR Corporation is one of the oldest and most established airline companies in the industry.
Even though AMR has weathered world wars, deregulation, fuel price volatility and growing
threats of terrorism, and other airline problems, the corporation still managed to get back and
redeem its position as one of the largest airline companies in the business. In June 2009, AMR
got the highest market share in the industry with 22%.
OPERATIONAL NETWORK
AMR is headquartered in Fort Worth, Texas and employs more than 80,000 people around the
world. Based on their Annual Report in 2011, AMR through American Airlines, AMR Eagle
and AmericanConnection, the company served more than 250 cities in approximately 50
countries with, on average, 3,400 daily flights. The combined network fleet numbers
approximately 900 aircraft. Domestically in the United States, AMR has five primary market
hubs which are Dallas/Fort Worth (DFW), Chicago O’Hare, Miami, New York City and Los
Angeles while in addition to its extensive domestic service, the Company provides
international service to the Caribbean, Canada, Latin America, Europe, and Asia.

FREIGHT AND CARGO

According to the Annual Report of AMR in 2011, American Airlines Cargo (AACargo)
provides over 100 million pounds of weekly cargo lift capacity to major cities in different
continents and countries such as United States, Europe, Canada, Mexico, the Caribbean, Latin
America, and Asia. AACargo is one of the largest air cargo in the world. In 2011, AACargo
topped the list of cargo carriers by tonnage at New York’s JFK International Airport, one of
the world’s leading international air cargo centers, according to data provided by the Port
Authority of New York and New Jersey. Also during 2011, the cargo division of AMR, which
is on its 67th year of service, generated $703 million in freight and mail revenue, accounting
for approximately 3.0% of AMR’s operating revenues. This was a 4.5% increase from 2010.