Value Chain Analysis of American Airlines 

American Airlines Group Inc. is an aviation American multinational corporation. It came into existence as a result of the merger of various US airlines in 2013. Today, we’ll discuss the value chain analysis of American Airlines; primary and supporting activities in the process of value chain analysis Example Company. They are inbound and outbound logistics, operations, marketing, and customer service; infrastructure, HRM, technology, and procurement as an application of the value chain analysis process.

Substitutes of American Airlines

• Northwest Airlines,
• Delta Airlines,
• United Airlines,
• JetBlue Airways, 
• Boeing
• Air France KLM,
• Sun Country Airlines

The Value chain analysis of American Airlines would analyze the primary and supporting activities in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, HRM, technology, and procurement. Here’s American Airlines value chain analysis company example as follows;

Value Chain Analysis of American Airlines

Let’s discuss the primary and supporting activities involved in the process of value chain analysis of American Airlines. It is an application of value chain analysis based on Porter’s model; some of the key elements and components of value chain analysis are as follows;

Primary Activities of American Airlines

Some of the five main primary activities in the value chain analysis of American Airlines are as follows;

Inbound Logistics of American Airlines

I-Effective Relationship with Suppliers

American Airlines has established and maintained very good and effective relationships with its aircraft suppliers like Airbus and Boeing along with many other suppliers. In fact, the company’s fleet comprised a wide variety of Airbus and Boeing aircraft in the family of the following;

• Airbus A320, A321, A319, and other variants
• Boeing 737 family, 787 Dreamliner

Effective relationships with aircraft suppliers and hotels would help the aviation company to have timely repair and maintenance services; delivery of packaged meals for passengers on-flight, and other routine items.

II-Standards for Suppliers

American Airlines has shown a strong commitment to the highest standards of environmental protection, safety, and labor protection. In fact, the company has set standards and guidelines for suppliers to comply with them. Some of them are as follows;

• Integrity and honesty
• Taking the right course of action
• Good judgment and decision-making
• No forced or child labor
• Without discrimination
• No retaliation
• Health and safety of customers and employees
• Protocol for emergency situation

Outbound Logistics of American Airlines

I-Ticket Distribution

Ticket distribution is one of the key processes of outbound logistics of American Airlines. According to an estimate, approximately 70-75% of the company’s ticket booking is via direct channel. Approximately 25-30% of the reservations come from the travel agents as a sales expense that the company has to carry. Of which, the purpose of traveling for customers is as follows;

• 35% leisure
• 35% mixed reasons
• 30% business

II-Quality and Safe Service

American Airlines offers various types of tickets to the different sections and classes of the airplane. It could be the main cabin, premium economy class, domestic first class, business flagship, or flagship first. The objective of all these various classes is to target various segments of the customer market relevant to the needs and requirements.

Operations of American Airlines

I-Sustainable Operations

American Airlines engages in environmentally friendly and sustainable practices to decrease the carbon footprint on the environment. In fact, the environmental policy of American Airlines comprises of following elements;

• Conserve biodiversity and stop deforestation
• Decreasing noise
• Avoiding pollution
• Low wastage
• Efficient utilization of resources

II-Renewable Energy

American Airlines has made a strong commitment to employ renewable sources of energy. In fact, the aviation brand plans to achieve 2.5 million gigajoules of renewable energy by the end of 2025. The company procured 644,000 GJs of renewable energy in 2022, which is a significant increment compared to the historical procurement.

III-Integrated Operation Centers

American Airlines has established an IOC (integrated operation centers) unit that works round the clock to ensure sure smooth functioning of the company’s operations. It comprises of following figures;

• Flight attendants – 9000
• Pilots – 4500
• Flights – 1 million annually
• Customers – 500,000 daily
• Maintenance operation control – 1000 aircraft
• Flights – 6000 daily
• IOC team – 1700 members

Marketing & Sales of American Airlines

American Airlines employs various types of marketing and promotional strategies like referral or loyalty programs to attract and retain the attention of customers. It has allowed the company to establish a loyal database of customers and strengthen its brand image and brand positioning in the aviation industry. The sales and marketing team of a company performs the following functions and they’re as follows;

• Sales management
• Field sales
• E-commerce
• Marketing communication
• Business development
• Product management
• Advertising

Services of American Airlines

American Airlines pays significant attention to providing top-quality customer service to its passengers and visitors. The aviation brand has taken a series of steps to simplify flight booking, onboarding, and checkout processes. Efficient quality customer service helps the company to increase customer satisfaction. A few incidents of missing luggage o delayed flights occasionally happen when the company deals with millions of passengers.

Supporting Activities of American Airlines

Some of the main supporting activities in the value chain analysis of American Airlines are as follows;

Infrastructure of American Airlines

American Airlines has established a strong infrastructure comprising of large fleet size, a subsidiary of flagship hotels and airlines, and a worldwide network of partners and stakeholders. It helps the company to amplify the customer satisfaction level and smoothly conduct its operations at a mass scale without any disruptions.

HRM of American Airlines

American Airlines employed roundabout 130,000 employees to manage its global operations. The human resource department of American Airlines plays a key role in performing various routine operations. They’re like training, recruitment, development, promotion, incentive plans, and others. The aviation company has made a strong commitment to building a diverse and innovative workplace environment.

Technological Development of American Airlines

American Airlines invests a significant amount of capital resources in the development of sustainable technology and employing renewable sources of energy. In fact, the aviation brand plans to decrease its carbon footprint by employing renewable sources of energy and focusing on achieving zero carbon by 2025.

Procurement of American Airlines

American Airlines also strongly believes in the sustainable sourcing and procurement of aircraft and other supplies. The company has established strict guidelines and regulations for suppliers to ensure the right and on-time procurement to avoid any type of delays and disruptions.

Conclusion: American Airlines Value Chain Analysis Example Company | Application of Value Chain Analysis Process 

After an in-depth study of the value chain analysis of American Airlines; we have realized that American Airlines is the world’s leading aviation company. If you are learning about the American Airlines value chain analysis Example Company; then you should keep in mind the abovementioned primary and supporting activities. They’re inbound and outbound logistics; operations, marketing and sales, and services; infrastructure, procurement, HRM, and technological development as an application of the value chain analysis process.