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American Airlines Group Inc.

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About American Airlines Group Inc.

American Airlines Group (AAG) is the largest airline in the US and one of the largest in the world. The company's mainline carriers provide scheduled air transportation along with its group of regional subsidiaries and third-party regional carriers operating as American Eagle. It also offers freight and mail services through its cargo division. In all, American operates nearly 6,700 flights daily to 350 destinations in more than 50 countries. It operates about 950 mainline aircraft and almost 600 regional aircraft. AAG is also part of the oneworld alliance, where member carriers share airport lounge facilities and offer interconnected loyalty programs.

Operations

AAG provides scheduled air transportation through its mainline carrier network as well as through regional carriers. Its mainline segment accounts for more than two thirds of total sales and operates close to 950 aircraft. Regional operations (about 15% of total sales) provide services under the “American Eagle” brand. American Eagle carriers include wholly-owned subsidiaries Envoy, PSA, and Piedmont. Third-party regional carriers including Republic, Mesa, Compass, ExpressJet, SkyWest, and Trans States.

The company's Cargo segment (accounts for less than 5% of total sales) also provides a wide range of freight and mail services with facilities and interline connections available across the globe.

Geographic Reach

Headquartered in Fort Worth, TX, AAG flies to 350-plus destinations in more than 50 countries. Its hubs are located in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington DC, with international services to Canada, Central and South America, Asia, Europe, Australia, and New Zealand.

Sales and Marketing

AAG sells its tickets through several distribution channels including its website (www.aa.com), reservations centers, and third-party distribution channels. Its loyalty program offers rewards to travelers for their continued patronage. Advertising costs in 2017 were $135 million, up $20 million from 2016.

Financial Performance

American Airlines recovered in 2017 after posting two straight years of revenue declines. Net sales increased 5% to $42.2 billion compared with $40.2 billion in 2016. Mainline and regional passenger revenues added up to $36.1 billion, a $1.6 billion hike from the previous year.

AAG's net income decreased by 65% from $2.7 billion in 2016 to $1.9 billion in 2017. The drop was mainly due to nearly $1 billion in net interest expense and higher operating costs (primarily increasing fuel prices and employee wages). Since its merger with US Air in 2015, American has been investing more than $5 billion annually in capital expenditures for its fleet, products, and team members. The company reports that by 2021, it will reduce capex to $2 billion.

Cash at the end of fiscal 2017 was $295 million, a decrease of $27 million from the prior year. Cash from operations contributed $4.7 billion to the coffers, while investing activities used $3.6 billion, mainly for capital expenditures. Financing activities used another $1.1 billion for dividends to stockholders and the company's stock repurchase program.

Strategy

AAG is planning significant investments to expand capacity focusing on its hubs in Dallas/Fort Worth (DFW) and Charlotte and adding new routes to medium- and smaller-sized cities such as South Bend, IN, Panama City, FL, and Missoula, MT. In 2019, American plans to add 15 gates and 100 departures per day at DFW and in 2020, seven new gates at Charlotte with another 75 daily departures. 

The company is targeting increased revenues from continued investments in product and customers. These include a refresh of its Admiral's Club facilities in Boston, Charlotte, and Pittsburgh, TV capabilities for domestic flights, and high-speed WiFi. Corporate clients can now book travel through aa.com as a result of the company's integration with SAP Concur TripLink, and through a new partnership with Alibaba, customers in Asia can make payments using Alipay on aa.com/China. American also cites operational reliability as one of its top corporate priorities and is reviewing its planning processes to ensure better service during summer and year-end holiday peak periods.

With a new product segmentation strategy, AAG aims to increase passenger sales by close to 10% in 2018. The company introduced Premium Economy, an upgrade to its Basic Economy class, with plans to further leverage this higher-value product with increased merchandising efforts. It has also removed the carry-on bag restriction in Basic Economy, allowing AAG to offer basic economy to more markets. 

Mergers and Acquisitions

AAG in mid-2017 made a significant move to expand internationally with the announcement of a $200 million equity investment in China Southern Airlines, and a 2018 codesharing agreement with China Southern is giving customers access to additional destinations in China as well as North and South America. AAG customers are able to access nearly 40 destinations beyond Beijing and more than 30 destinations beyond Shanghai.

Company Background

In 2011, American Airlines' parent company, AMR Corporation, filed for bankruptcy. It emerged from Chapter 11 in late 2013 and at the same time merged with rival US Airways in a mega deal worth $11 billion. The milestone transaction created the world's largest airline. The combined entity formed the American Airlines Group and is led by former US Airways CEO Doug Parker.

American Airlines Group Inc.

4333 AMON CARTER BLVD
Fort Worth, TX 76155-2664
Phone: 1 (817) 963-1234

Stats

Employer Type: Publicly Owned
Stock Symbol: AAL
Stock Exchange: , NASDAQ
President: Robert D. Isom
EVP and CFO: Derek J. Kerr
Chairman and CEO: W. Douglas Parker
Employees (This Location): 711
Employees (All Locations): 128,900

Major Office Locations

Fort Worth, TX

Other Locations

Huntsville, AL
Mobile, AL
Bentonville, AR
Fort Smith, AR
Little Rock, AR
Phoenix, AZ
Tempe, AZ
Tucson, AZ
Burbank, CA
Camarillo, CA
El Segundo, CA
Fresno, CA
Long Beach, CA
Los Angeles, CA
Monterey, CA
Oxnard, CA
Palm Springs, CA
Perris, CA
San Diego, CA
San Francisco, CA
San Jose, CA
Santa Ana, CA
Denver, CO
Gunnison, CO
New Haven, CT
Windsor Locks, CT
Washington, DC
Altamonte Springs, FL
Coral Gables, FL
Fort Lauderdale, FL
Fort Myers, FL
Gainesville, FL
Jacksonville, FL
Key West, FL
Miami, FL
Orlando, FL
Pensacola, FL
Tallahassee, FL
Tampa, FL
West Palm Beach, FL
Atlanta, GA
Brookhaven, GA
Columbus, GA
Savannah, GA
Honolulu, HI
Cedar Rapids, IA
Des Moines, IA
Chicago, IL
Evansville, IN
Fort Wayne, IN
Indianapolis, IN
Florence, KY
Lexington, KY
Louisville, KY
Boston, MA
Baltimore, MD
Portland, ME
Grand Rapids, MI
Gwinn, MI
Lansing, MI
Manistee, MI
Portage, MI
Saint Paul, MN
Kansas City, MO
Saint Louis, MO
Springfield, MO
Cary, NC
Charlotte, NC
Cornelius, NC
Fletcher, NC
Greensboro, NC
Greenville, NC
Morrisville, NC
Raleigh, NC
Wilmington, NC
Winston Salem, NC
Omaha, NE
Newark, NJ
Albuquerque, NM
Roswell, NM
Santa Fe, NM
Las Vegas, NV
Reno, NV
Albany, NY
Buffalo, NY
Dexter, NY
Flushing, NY
Jamaica, NY
New Windsor, NY
New York, NY
Rochester, NY
White Plains, NY
Canton, OH
Cleveland, OH
Columbus, OH
Swanton, OH
Vandalia, OH
Oklahoma City, OK
Tulsa, OK
Portland, OR
Avoca, PA
Middletown, PA
Montoursville, PA
Philadelphia, PA
Pittsburgh, PA
Warwick, RI
Hilton Head Island, SC
Blountville, TN
Chattanooga, TN
Memphis, TN
Nashville, TN
Abilene, TX
Amarillo, TX
Austin, TX
Dallas, TX
El Paso, TX
Fort Worth, TX
Houston, TX
Irving, TX
Killeen, TX
San Angelo, TX
San Antonio, TX
Southlake, TX
Waco, TX
Wichita Falls, TX
Charlottesville, VA
Lynchburg, VA
Newport News, VA
Norfolk, VA
Richmond, VA
Roanoke, VA
Burlington, VT
Seatac, WA
Green Bay, WI
Charleston, WV
Santiago, Chile
Beijing, China
Brasilia, Brazil
Confins, Brazil
Manaus, Brazil
Porto Alegre, Brazil
Recife, Brazil
Rio De Janeiro, Brazil
Salvador, Brazil
Sao Jose Dos Pinhais, Brazil
Sao Paulo, Brazil
Calgary, Canada
Dorval, Canada
Mississauga, Canada
Richmond, Canada
Ciudad De Mexico, Mexico
Domodedovo, Russia
Moscow, Russia
Freeport, Bahamas
La Paz, Bolivia
Quito, Ecuador
Horley, England
Hounslow, England
Manchester, England
Frankfurt Am Main, Germany
Rionegro, Colombia
Ciudad De Buenos Aires, Argentina
Tsim Sha Tsui, Hong Kong
Zürich, Switzerland
Boca Chica, Dominican Republic
Punta Cana, Dominican Republic
Santo Domingo, Dominican Republic