Travel News

American Airlines Continues to Reorganize

American Airlines continues to experience difficulties, as compared to most of their legacy airline peers. Their recent bankruptcy filing as well as the recent announcement that they plan to cut 13,000 employees are indications of this continued struggle.
A combination of three factors has created a perfect storm for American Airlines at a time when other major airlines are actually experiencing strong comebacks:

  1. American was the only one of the legacy airlines who didn’t file bankruptcy in recent years. This has left them straddled with unrealistic labor contracts.
  2. They are the only one of the major airlines that didn’t find a merger partner (Delta/Northwest, United/Continental, and US Air/America West).
  3. They have led the charge in going “direct” for their distribution, which has alienated their sales and marketing partners (see “Where is American Airline’s Distribution Strategy Headed?“).

American Airlines once had a legacy of being an industry leader in many areas. Under the leadership of Bob Crandall they pioneered computer reservation systems with SABRE. They were a pioneer with their AAdvantage frequent flyer program. They also have a rich history of great service and many accomplishments. We hope that with this reorganization they will be able to find their way and continue to contribute to making the airline industry a solid part of the US economy.