American Airlines Group Inc
American Airlines Group Inc. is a leading firm in the sector. It is a well-known and expansive American carrier. It provides transport services for both passengers and cargo (Yahoo, 2022). Like other players in the sector, the carrier has experienced significant trouble since the Covid-19 hit. The ban on air travel, competition from low-cost carriers, inability to attract top talent, and high level of debt are among the leading concerns (American Airlines Group Inc., 2022). These issues create the basis for innovative activities that would improve the carrier’s financial position.
SWOT Analysis
| Strengths
Improving domestic flights Ease of reserving tickets High customer satisfaction Market leader |
Opportunities
New consumer trends Low rates of inflation New technology for expansion |
| Weaknesses
Poor financial planning level of debt High attrition rate loss of key personnel Declining sales/revenue Discrimination Limited infrastructure |
Threats
Covid-19 spread Reducing demand Deteriorating economic conditions Competition Terror attacks |
The COVID-19 pandemic has made it difficult for airlines to operate optimally. The lack of flights has led to insufficient revenue that would normally cater to various expenses, including labor. Therefore, the first element of innovation to keep the company afloat is to encourage voluntary turnover among employees. As a result, this should lead to early retirement. Besides early retirement, other employees would voluntarily leave their positions for better pursuits. Consequently, this will leave the carrier with fewer employees.
The next stage is to offer current employees opportunities to multitask in different positions. This means that they can fill positions and fulfill their roles. The involvement of the human resources department is necessary for modifying the company’s HRIS to accommodate the provision of additional skills in employees’ resumes and profiles. In turn, this should ease the managers’ ability to scout for required staff members to fill certain positions temporarily. They will then send requests to identified staff members. Employees will be attached to the new positions for a specified period and receive bonuses for their involvement. The approach will reduce labor expenses and reduce the company’s financial pressure.
Finally, the carrier will offer low-cost flights that will enable the current market share retention. Additionally, this will facilitate competition with other low-cost carriers, which may capture the company’s clients. The company will also seek to attract domestic travelers and short-haul international passengers to ensure continued operations. The low-cost flights will cover major expenses and include lower markups to ensure they have an advantage over the other carriers. The quality of the flight experience will be retained to exceed clients’ expectations. The objective will be to increase the sales volume.
The players in the airline industry have faced difficult times due to COVID-19. Their operations have diminished, leading to low revenue and consistent expenses. This situation demands that the carriers become innovative and take advantage of the current opportunities before the market conditions are restored to normal. American Airlines Group Inc. will encourage voluntary turnover, share its remaining employees between positions, offer bonuses for the same, and reduce the cost of flight tickets. This approach should reduce the labor cost significantly. In addition, it should promote employee satisfaction because they can demonstrate their additional skills. Most importantly, the solution should retain the current market share, facilitate competition with other carriers that charge low fares, and increase the volume of travelers. The clients’ willingness to pay is expected to exist because their expectations will be surpassed compared to other players’ services.
References
American Airlines Group Inc. (2022). Form 10-K.
Yahoo. (2022). American Airlines Group Inc. (AAL). Retrieved from Yahoo Finance: https://finance.yahoo.com/quote/AAL/profile?p=AAL
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Question 
Overview
Raising money to invest in innovation is hard. Companies, both large and small, work to strike a balance between executing an existing business model and thinking ahead to advance their business. As individuals think critically about how their business should move forward, they should first get a 360-degree view of their environment. This journey starts with research on the current state of the business and critical thinking questions that can help leaders drill down deeper.
American Airlines Group Inc
Prompt
In this blog post, you will take on the role of the recently promoted chief innovation officer (CIO) of an established U.S.-based company of your choosing. It is within your responsibilities to discover new ways to improve an existing product or service in North America or to introduce a new product or service to the market that will give the company a market edge over the competition and fit within the company’s core competencies. For the purposes of this blog post and for this entire course, you will do the latter.
The new product or service must be something that cannot be easily duplicated and take into account consumers’ willingness to pay (WTP). If a consumer doesn’t have a problem or need for the product or service offered, they will not be willing to exchange money for the solution.
The first step of such an undertaking requires research and an examination of the selected company’s financials and current resources. Moreover, this new product or service offering must leverage the strengths of the company.
Using MarketLine, Yahoo Finance, and the investor relations page on the company’s website, select and research an established company of your choice. Specifically, look at the company’s 10K Report with a focus on the company’s business in North America. You will continue to research and work with this company throughout this course on milestones and projects.
In your blog post, identify the company you researched and describe its potential new and unique product or service. Include an image of the company’s current SWOT from the Shapiro Library and address the following questions:
Value proposition: What is the company’s main business?
What value does the company deliver to the customer?
Profitability: Is the company currently profitable?
SWOT analysis strengths: What are the company’s main strengths to be leveraged to create a new product or service?
Product or service singularity: What is unique about the new product or service?
New product or service projections: How can the new product or service improve profitability? Note: This is an estimation based on research on the company’s current market position.