Speading Their Wings

American Airlines Group (AAG) is a publicly traded holding company with headquarters in Fort Worth, Texas. The company was formed following the merger of AMR Corporation and U.S. Airways Group on December 9, 2013 (Laporte).  The merger between the two parent companies for American Airlines and U.S. Airways has grown to operating in 55 countries with a fleet of over 1,500 aircrafts, and close to 7,000 daily departures serving almost 200 million passengers worldwide, as of June 2015.  AAG has since dropped the U.S. Airways label (About Us).  AAG had one of the highest domestic market shares (17.8%) among carriers operating in the U.S. in 2018 (U.S.).

Although American is among the three biggest U.S. airline carriers they don’t have as big of a global footprint as Delta and United.  American is hoping to change that by 2020 by offering non-stop flights to India.  American had tried to do this before in the late 2000’s, but they decide to cancel them because they deemed them unprofitable due to the size of their planes.  They hope to rectify that this time around with the order of 47 Bowing 787 Dreamliners (American).  Currently the bulk of U.S. to India flights (and vice versa) have been handled by United Airlines and Air India, however, Delta has a connection partner for connection flights in and out of India.

There are an estimated 2255 flights to New Delhi and Mumbai each year.  If American would use only a third of the 47 Bowing 787 Dreamliners (roughly 15) to fly to these destinations, then it would give them just over 2/3 of the market share with 5475 flights per year (Laporte).  It makes business sense for American to take on the venture as flights range from $490 to over $2867 (Cheapest).  Lets just as the average flight was $1700, this would mean that from 15 flights a day to Mumbai and New Delhi, American would generate over $9,308M in revenue per year.  Also, by deploying 15 planes for these flights, American can expand the number of hubs that passengers can fly out of, as United only have 5 cities with flights to India.

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References:

U.S. airline industry market share 2018. (n.d.). Retrieved from https://www.statista.com/statistics/250577/domestic-market-share-of-leading-us-airlines/

American Airlines Is Considering Direct Flights to India and Africa. (n.d.). Retrieved from https://www.travelandleisure.com/travel-news/american-airlines-boeing-787-dreamliner-india-africa-markets

Cheapest flights of the year from United States to India. (n.d.). Retrieved from https://www.skyscanner.com/transport/flights/us/bom/190517/190524/?adults=1&children=0&adultsv2=1&childrenv2=&infants=0&cabinclass=economy&rtn=1&preferdirects=false&outboundaltsenabled=false&inboundaltsenabled=false&ref=home

About us. (n.d.). Retrieved from https://www.aa.com/i18n/customer-service/about-us/about-us.jsp?anchorEvent=false&from=footer

Laporte, J. (n.d.). Topic: American Airlines Group. Retrieved from https://www.statista.com/topics/2425/american-airlines-group/