American Airlines: Company Culture, Strategy, Structure

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American Airlines
American Airline is the world’s largest airline in terms of size and the number of passengers it services per day. Its headquarters are in Fort Worth, Texas in the Dallas Fort Worth Metro complex. The airline works hand in hand with its partners to produce 6,800 flights per day to around 350 destinations in more than 50 countries. Additionally American Airline is also a founding member of One World Alliance which is the third largest airline alliance in the world. Its regional services are operated by subsidiaries under the name of American Eagle. The company annually handles more than 200 million passengers with an average passenger count of 500 people on a daily basis.
Functional Areas
American Airlines announced in 2019 that it aims at improving time performance. This is because the company has been fighting with engineers for most of 2019 with the grounding of BOIENG 727 MAX and the bad weather conditions that are affecting most hubs. However, the data collected at the beginning of November 2019 suggests that the airline’s time management efforts are starting to pay off. To add on that, the airline finished November tied in the second place with South airlines on the on-time arrival derby (CNBC News). Both airlines got 84% of their flight to the departure gate on time in November. An airline considers a flight to be on time if it arrives within 15 minutes of its scheduled time. For the American Airline, this feat was an improvement of October’s performance. American Airline’s senior vice president further stated that the airline operated better in November than it had in any previous months. He also stated that there were fewer out of service aircrafts and only twenty three cancellations in the whole period of November. In 2020, Coronavirus turned things upside down. Faced with the worst airline crisis, American Airlines changed its flight schedule to make ‘some recovery demand’ as the vice president of Network planning Brian Znotins stated. Soon, the airline hubs were overcrowded with passengers and there were several complaints about overcrowded flights. However, even with the number of Corona Virus patients going down, the airline has predicted it might fly about 40% of what it flew last year.
Company Culture
Company culture is essential to employees because workers are more likely to work diligently when their needs and values are consistent with those of the employers. American Airlines has had an employee base of 130, 000 since it’s merge with US Airways five years ago. With this huge employee base, trust between workers becomes an importance factor in order to ensure the success of the company. According to Mark Mitchell, the company’s HR manager, the company’s Single Advantage program created an operation program to help establish the efficiency they were looking for (CNBC News). The success of the program allowed Mitchell to create a people centric culture. The American Airlines promotes a people centric culture by: First and foremost, the workers demonstrate caring in everything they do. The airline brings together people with different cultures and by introducing trust, caring and collective responsibility, a people-centered culture emerges. Satisfied employees often bring positive financial and operation results. Secondly, it builds a people driven culture using the SAP Success Factors suite of products. The airline, which has 130, 000 team members in 130 countries touches 600 of them on a daily basis to answer questions. The company uses these answers to make changes that satisfy workers. Mitchel further states that this strategy helps the company to demonstrate caring and build trust (CNBC News). As a result, the company now has a way to gauge how the teams feel about the company’s progress.
Company Structure
An organizational structure is an important part of any business. American Airlines announced a reorganization of its leadership team in 2016 after Robot Osom was promoted to president. Additionally, in a letter sent to employees, he announced the creation of a commercial and operations team that had three executives each who will report directly to him (CNBC News). With this new structure, Osom stated that everyone will have a say in the decision making of the company. For instance, a decision made by the revenue management team will include viewpoints from the customer service and operations. That being said, American Airline needs a leadership change. The airline has failed to give the employees a mission statement and a lot of workers are beginning to feel misunderstood by the management. This shows that although the airline has a huge customer base, it isn’t maximizing its true potential. A leadership change might adequately address this issue. Furthermore a recent analysis of the market shows that the stock has plummeted by (-2.12%) (GmbH). At this rate, the airline will continue to experience huge losses if the leader is not changed.
Strategy, Structure and Culture
American Airlines has used its people centered culture to offer quality services to customers. The end result has been nothing short of astounding. Customers have often stated that they use the airline to travel because of the dependable and friendly environment. As with any airline, it has its share of disgruntled customers but the majority is content with the services offered.
Company CEO
American Airlines CEO Doug Parker has demonstrated accountability, resilience and vision in the seven years he’s held the post. His accountability is portrayed in the open door policy he implemented at American Airlines headquarters. Before 2013, visitors had to get past one security guard and two assistants in order to get to his office. Today, the security guard and one of the assistants are gone in order to put visitors at ease (Augustine p.12). Secondly, Parker has demonstrated resilience in the various changes he has made at the airline. The changes i...