PRESENTATION

ON

STRATEGIC EVALUATION OF AMR CORPORATION

PREPARED FOR

Major General(Retired )Prof. Alauddin M A Wadud, BP
As a part of strategic management Course in Bangladesh University of management

Roll No.Roll No. E1104041 --.Roll No. E1104044 Salauddin Wahid Adnan Mohammad Shahidul Haque Talukdar Md. Abad Adward Sapan Dhaki Shafi Samiur Rahman --.Roll No.PREPARED BY Mozammel Haque Bhuiyan Syed Adnan Parvez Hossain Md. E1104042 --.Roll No.Roll No. Wahid Murad --. E1104032 --.Roll No.Roll No. E1104035 . E1104050 --. E1104043 --. E1104033 --.

OBJECTIVES Identify significant points of AMR corporation’s strategy Evaluate the company’s performance in regards of different aspects Identifying the problems and success of the strategy Evaluate AMR’s performance in regards of industry Recommendations for improving the strategy .

PRESENTATION SEQUENCE Introduction to AMR corporation Strategies of AMR Performance of AMR in 2011 Success and failures Comparison with competitors Recommendations .

AMR CORPORATION Formed in 1982 Own 2 mainline airlines and 3 regional airlines Headquarter at Fort worth. Texas Founding member of One World Alliance Operates American airlines and American Eagle .

STRATEGIES OF AMR Flight Plan 2020 Cornerstone Strategy Reduction of consolidated seat capacity Joint Business alliance Voluntary petition for Bankruptcy $3 billion cash flow enhancement .

PERFORMANCE OF AMR IN 2011 $1.Expense and Income 26000 24000 22000 20000 18000 2011 2010 Year 2009 in million $ Total operating revenue total operating Expense .4 billion net loss Revenue.

) Revenue increased by $1.PERFORMANCE OF AMR IN 2011(CONT.8 billion Revenue break down 30000 25000 20000 15000 10000 5000 0 2011 2010 Year 2009 Other Revenue Cargo million $ Regional Affiliates Passenger American Airlines passenger .

PERFORMANCE OF AMR IN 2011(CONT.1 billion 26000 26000 24000 24000 22000 22000 20000 20000 18000 18000 Total operating Expense Total operating Cost In million $ In million $ 2011 2011 2010 2010 Year Year 2009 2009 .) Operating expenses increased by $ 3.

) Fuel cost increased by $1.PERFORMANCE OF AMR IN 2011(CONT.9 Billion Fuel consumption and cost 10000 8000 6000 4000 2000 0 2011 2010 Year 2009 in million Gallons Consumed Total Cost (in doller) .

5 80 2011 2010 Year 2009 % Passenger Load factor .) Passenger load factor increased by only .5 81 80.PERFORMANCE OF AMR IN 2011(CONT.1% Passenger Load factor 82.5 82 81.

29 cents Revenue And expense per available seat mile 20 cents 15 10 5 0 2009 2010 Year 2011 Passenger revenue yield per seat mile (cents Operating expenses per available seat mile (cents) .PERFORMANCE OF AMR IN 2011(CONT.) Net revenue per available seat mile decreased by .2.61 cent to .

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 Increase in the customer loyalty .

) Net Revenue.COMPARISON WITH COMPETITORS(CONT. expense and Income 40000 30000 In Million $ 20000 10000 0 -10000 AMR Delta UnIted Net revenue Net Expense Net Income Airlines .

COMPARISON WITH COMPETITORS(CONT.) Fuel Consumption and Cost 14000 12000 10000 8000 6000 4000 2000 0 AMR Delta Airlines UnIted In Million $ Fuel consumption in gallon Fuel Cost in doller .

8 In Million $ % 82.8 0 81.2 passenger load factor Net Revenue.) 83 40000 82.6 -10000 Net revenue Net Expense Net Income AMR AMR Delta Airlines Airlines Delta UnIted United .6 30000 82.4 20000 82. expense and Income 82 10000 81.COMPARISON WITH COMPETITORS(CONT.

) 17 17 16 16 15 15 14 14 13 13 operating expenses per available seat mile operating expenses per available seat mile In cent In cent AMR AMR Delta Delta Airines Airines United United .COMPARISON WITH COMPETITORS(CONT.

5 11 AMR Delta Airlines United .) Passenger revenue yield per available seat miles 13 12.5 in cents 12 11.COMPARISON WITH COMPETITORS(CONT.

COMPARISON WITH COMPETITORS(CONT.) Increase load factor to match its competitors Decrease operating cost Increase revenue per available seat miles Increase market share through merger .

RECOMMENDATIONS Increase the passenger load factor Increase the fare to match the oil price Increase its global presence Look for a merger partner .

RECOMMENDATIONS Consider salary cut Reevaluate the cornerstone strategy Implement enhanced load capacity strategy for regional carrier Add new high profit routes .

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Thank you .

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