Segments of American Airlines Considered [1 of 3]

Abstract


This consideration reviews AMR group (American Airlines, American Eagle and American Connection) by way of its segmentation with an eye toward more effective marketing and greater profitability.



Introduction

There will be some degree of redundancy here, as the recent past (since early March) has seen this author approach this topic from various perspectives before (Davis, 2011). Nonetheless, this is a current effort to create something fresh. If nothing else, this represents a new review based on ostensibly new source material.

Other introductory remarks should likely include the nature of what we are looking at, for the new reader. American Airlines, (actually part of AMR group, along with commuter sister carrier American Eagle and regional sibling (based out of Chicago) American Connection) is among the largest carriers in the world (the fourth), and has been active since 1934, making it one of the primary and legacy carriers for the United States, and in the world. Obviously, having evolved to a point where the umbrella organization has three distinct expressions already is recognition of customer-centricity segmentation. Beside the code-sharing announcements of the strategic alliance structure OneWorld, American maintains code-sharing agreements with more than a dozen other airlines. Last year, tweaking this dynamic a bit further, American announced a partnership with JetBlue to enhance its New York operations (AA.mediaroom.com, 2010-03-31). A new alliance between American Airlines Inc., British Airways PLC (BA), and Iberia was recently approved (Anonymous, 2010). This is on top of its already ongoing efforts to upgrade and enhance services, including expanded routes. These are all ways to extend an effective reach and provide more personalized service by sharing with other providers; and in this economic environment, such alliances and partnerships have become a necessity.

Other iconic customer centric segmentation expressions include Aadvantage, the first ever frequent-flyer program, and the various Admirals Clubs and AA Flagship Lounges maintained at airports across the United States and at Heathrow, London.

A final introductory note has to acknowledge the razor thin margins of the industry and the bondage that they all experience as the “Wild West” of commodities trading continues to escalate the global price of fossil fuels. This problem is further exacerbated by the petroleum industry producing a fungible product (oil from Arkansas and oil from Libya becomes essentially the same) within the only legalized cartel on the planet, OPEC (Associated Press, 2011)(Kuancheng & Ko-chen, 2011).



Determining Profitable Markets

When it comes to serving various geographic markets, the only continent American does not fly to is Antarctica; however, they can still help get you there. Given that the earth is finite, this positioning of reaching geographic markets seems relatively complete (adjusted back and forth based on its external variables, mostly whether to expand direct service or not, various economies and travel patterns)(Associated Press, 2011). While at first blush this may appear to be comprehensive from a geographic perspective only, the breath of this holistic reach necessarily exposes American to speak to every cultural demographic as well. Aside from its partnerships, customer centric expressions include anyone of any background (race, gender, etc.) seated as equally as anyone else, physically challenged accommodations, and meals (where they still occur) that include considerations such as reflective of the cuisine flying from, the cuisine flying to, vegetarianism and kosher.