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 direct aircraft, full fourth dimension 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 primed(p) personifys for American sex act to its competitors. In a market where fuel costs are extremely explosive and travelers expecting lower fares, it is extremely important to disengage a ratiocination belief at Americans cost coordinate as it relates to the possible environmental shocks that could face industry. Operating Expenses Examining AMRs o perating expenses we can becharm 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 different(a) employee benefits category is the largest operating expense, followed by aircraft fuel.

Other expenses overwhelm other 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 forage service (Exhibits 1, 2, 3). American Airlines overall cost structure lea ns to a greater extent than heavily to res! olved costs, some of which are committed fixed costs and others which are more discretionary in center (Exhibit 4). Fixed costs primarily consist of airplanes, maintenance, and wages, while changeable costs come most notably from fuel. A close-hauled look at AMRs wages, salaries, and benefits shows that the company has the highest number of full eon alike employees (FTE). The number... If you want to get a full essay, rove it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay