Presentation on AMR

8/2/2019 Presentation on AMR

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STRATEGICEVALUATIONOF AMR

CORPORATION

PRESENTATIONON


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Major General(Retired )Prof. Alauddin M AWadud, BP

As a part of strategic management Course in Bangladesh University ofmanagement

PREPARED FOR


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Mozammel Haque Bhuiyan --- Roll No. E1104041

Syed Adnan Parvez --- Roll No. E1104042

Hossain Md. Abad --- Roll No. E1104043

Adward Sapan Dhaki --- Roll No. E1104050

Shafi Samiur Rahman --- Roll No. E1104044

Salauddin Wahid Adnan --- Roll No. E1104032

Mohammad Shahidul Haque Talukdar --- Roll No. E1104033

Md. Wahid Murad --- Roll No. E1104035

PREPARED BY


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Identify significant points of AMR corporations strategy

Evaluate the companys performance in regards of different aspects

Identifying the problems and success of the strategy

Evaluate AMRs performance in regards of industry

Recommendations for improving the strategy

OBJECTIVES


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Introduction to AMR corporation

Strategies of AMR

Performance of AMR in 2011

Success and failures

Comparison with competitors

Recommendations

PRESENTATION SEQUENCE


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Formed in 1982

Own 2 mainline airlines and 3 regional airlines

Headquarter at Fort worth, TexasFounding member of One World Alliance

Operates American airlines and American Eagle

AMR CORPORATION


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Flight Plan 2020

Cornerstone Strategy

Reduction of consolidated seat capacity

Joint Business alliance

Voluntary petition for Bankruptcy

$3 billion cash flow enhancement

STRATEGIES OF AMR


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$1.4 billion net loss

PERFORMANCE OF AMR IN 2011

18000

20000

2200024000

26000

2011 2010 2009

inmillion$

Year

Revenue,Expense and Income

Total operating revenue

total operating Expense


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Revenue increased by $1.8 billion

PERFORMANCE OF AMR IN 2011(CONT.)

0

5000

10000

1500020000

25000

30000

2011 2010 2009

million$

Year

Revenue break down

Other Revenue

Cargo

Regional AffiliatesPassenger

American Airlinespassenger


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Operating expenses increased by $ 3.1 billion


18000

20000

22000

24000

26000

2011 2010 2009

Inmillion$

Year

Total operating Expense

18000

20000

2200024000

26000

2011 2010 2009

Inmillion$

Year

Total operating Cost


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Fuel cost increased by $1.9 Billion


0

2000

4000

6000

8000

10000

2011 2010 2009

inmillio

n

Year

Fuel consumption and cost

Gallons Consumed

TotalCost (in doller)


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Passenger load factor increased by only .1%


80

80.5

81

81.582

82.5

2011 2010 2009

%

Year

Passenger Load factor

Passenger Load factor


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Net revenue per available seat mile decreased by .61 cent to - 2.29cents


0

5

10

15

20

2009 2010 2011

cents

Year

Revenue And expense per available seat mile

Passenger revenue yield

per seat mile (cents

Operating expenses peravailable seat mile(cents)


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Increase in the customer loyalty ,quality and base size

Unable to cope up with fuel price rise

Unsuccessful Network Enhancement

Legal Disputes with GDS Companies

Increasing Debts

Increasing Pension Obligations

Large competitors with more market share

SUCCESS AND FAILURES


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COMPARISON WITH

COMPETITORS(CONT.)

-10000

0

10000

20000

30000

40000

AMR Delta UnIted

InMillion$

Airlines

Net Revenue, expense and Income

Net revenue

Net Expense

Net Income


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COMPARISON WITH

COMPETITORS(CONT.)

0

2000

40006000

8000

10000

12000

14000

AMR Delta UnIted

InM

illion$

Airlines

Fuel Consumption and Cost

Fuel consumption in

gallonFuel Cost in doller


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COMPARISON WITH

COMPETITORS(CONT.)

-10000

0

10000

20000

30000

40000

AMR Delta UnIted

InMillion$

Airlines

Net Revenue, expense and Income

Net revenue

Net Expense

Net Income

81.6

81.8

8282.2

82.4

82.6

82.8

83

AMR Delta United

%

Airlines

passenger load factor


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COMPARISON WITH

COMPETITORS(CONT.)

13

14

15

16

17

AMR Delta United

Incent

Airines

operating expenses per available seat mile

13

14

15

16

17

AMR Delta United

In

cent

Airines

operating expenses per available seat mile


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COMPARISON WITH

COMPETITORS(CONT.)

11

11.5

12

12.5

13

AMR Delta United

in

cents

Airlines

Passenger revenue yield per available seat miles


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Increase load factor to match its competitors

Decrease operating cost

Increase revenue per available seat miles

Increase market share through merger

COMPARISON WITH

COMPETITORS(CONT.)


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Increase the passenger load factor

Increase the fare to match the oil price

Increase its global presence

Look for a merger partner

RECOMMENDATIONS


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RECOMMENDATIONS

Consider salary cut

Reevaluate the cornerstone strategy

Implement enhanced load capacity strategy for regionalcarrier

Add new high profit routes


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Thank

you

Documents

Presentation on AMR