American Airlines Analysis

Introduction AMR (Ameri tail assembly Airlines and its subsidiaries) is the United States largest airline, serving cl 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 in operation(p) aircraft, full clip employees, revenue passenger miles (RPM) and on tap(predicate) seat miles (ASM) in the industry. However, after(prenominal) September 11, 2001, bigger whitethorn not be better. patronage the rich history of American Airlines, the large fleet of operating aircraft and high number of nonpolar employees equate to higher located 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 goal belief at Americans cost coordinate as it relates to the probable environmental shocks that could face industry. Operating Expenses Examining AMRs operating exp enses we can correspond 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 new(prenominal) employee benefits category is the largest operating expense, followed by aircraft fuel.

Other expenses overwhelm otherwise 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 provisions service (Exhibits 1, 2, 3). American Airlines overall cost structure l eans to a greater extent than heavily to o! pinionated costs, some of which are committed fixed costs and others which are more discretionary in nip (Exhibit 4). Fixed costs primarily consist of airplanes, maintenance, and wages, while changeful costs come most notably from fuel. A proximate look at AMRs wages, salaries, and benefits shows that the company has the highest number of full age alike employees (FTE). The number... If you want to get a full essay, consecrate it on our website: OrderEssay.net

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