8/2/2019 Presentation on AMR
1/24
STRATEGICEVALUATIONOF AMR
CORPORATION
PRESENTATIONON
8/2/2019 Presentation on AMR
2/24
Major General(Retired )Prof. Alauddin M AWadud, BP
As a part of strategic management Course in Bangladesh University ofmanagement
PREPARED FOR
8/2/2019 Presentation on AMR
3/24
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
8/2/2019 Presentation on AMR
4/24
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
8/2/2019 Presentation on AMR
5/24
Introduction to AMR corporation
Strategies of AMR
Performance of AMR in 2011
Success and failures
Comparison with competitors
Recommendations
PRESENTATION SEQUENCE
8/2/2019 Presentation on AMR
6/24
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
8/2/2019 Presentation on AMR
7/24
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
8/2/2019 Presentation on AMR
8/24
$1.4 billion net loss
PERFORMANCE OF AMR IN 2011
18000
20000
2200024000
26000
2011 2010 2009
inmillion$
Year
Revenue,Expense and Income
Total operating revenue
total operating Expense
8/2/2019 Presentation on AMR
9/24
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
8/2/2019 Presentation on AMR
10/24
Operating expenses increased by $ 3.1 billion
PERFORMANCE OF AMR IN 2011(CONT.)
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
8/2/2019 Presentation on AMR
11/24
Fuel cost increased by $1.9 Billion
PERFORMANCE OF AMR IN 2011(CONT.)
0
2000
4000
6000
8000
10000
2011 2010 2009
inmillio
n
Year
Fuel consumption and cost
Gallons Consumed
TotalCost (in doller)
8/2/2019 Presentation on AMR
12/24
Passenger load factor increased by only .1%
PERFORMANCE OF AMR IN 2011(CONT.)
80
80.5
81
81.582
82.5
2011 2010 2009
%
Year
Passenger Load factor
Passenger Load factor
8/2/2019 Presentation on AMR
13/24
Net revenue per available seat mile decreased by .61 cent to - 2.29cents
PERFORMANCE OF AMR IN 2011(CONT.)
0
5
10
15
20
2009 2010 2011
cents
Year
Revenue And expense per available seat mile
Passenger revenue yield
per seat mile (cents
Operating expenses peravailable seat mile(cents)
8/2/2019 Presentation on AMR
14/24
Increase in the customer loyalty ,quality and base size
Unable to cope up with fuel price rise
Unsuccessful Network Enhancement
Legal Disputes with GDS Companies
Increasing Debts
Increasing Pension Obligations
Large competitors with more market share
SUCCESS AND FAILURES
8/2/2019 Presentation on AMR
15/24
COMPARISON WITH
COMPETITORS(CONT.)
-10000
0
10000
20000
30000
40000
AMR Delta UnIted
InMillion$
Airlines
Net Revenue, expense and Income
Net revenue
Net Expense
Net Income
8/2/2019 Presentation on AMR
16/24
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
8/2/2019 Presentation on AMR
17/24
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
8/2/2019 Presentation on AMR
18/24
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
8/2/2019 Presentation on AMR
19/24
COMPARISON WITH
COMPETITORS(CONT.)
11
11.5
12
12.5
13
AMR Delta United
in
cents
Airlines
Passenger revenue yield per available seat miles
8/2/2019 Presentation on AMR
20/24
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.)
8/2/2019 Presentation on AMR
21/24
Increase the passenger load factor
Increase the fare to match the oil price
Increase its global presence
Look for a merger partner
RECOMMENDATIONS
8/2/2019 Presentation on AMR
22/24
RECOMMENDATIONS
Consider salary cut
Reevaluate the cornerstone strategy
Implement enhanced load capacity strategy for regionalcarrier
Add new high profit routes
8/2/2019 Presentation on AMR
23/24
8/2/2019 Presentation on AMR
24/24
Thank
you