Background of American Airlines

Ameri gutter Airlines is the worlds largest airline. American, American Eagle and the AmericanConnection airlines function 250 cities in everyplace 40 countries with much than 4,000 daily flights. The combined bring inwork fleet numbers more than 1,000 aircraft. Americans award-winning Web site, AA. com, bids users with easy access to check and book f ars, sum supply personalized news, information and locomote clefts.American Airlines is a founding member of the oneworld Alliance, which brings unneurotic some of the ruff and biggest names in the airline handicraft, enabling them to offer their nodes more services and benefits than any airline can provide on its own. Together, its members serve more than 600 destinations in over 135 countries and territories. American Airlines, Inc. and American Eagle Airlines, Inc. are subsidiaries of AMR potbelly. found on Peoples Daily online go out Tuesday, April 10, 2001, American Airlines became the worlds largest air carrier and grounded a venerable competitor aft(prenominal) acquiring the assets of bankrupt Trans World Airlines. pedestald on SKYTRAX which operates the Star rate system for the world airline industry, having introduced the weapons platformme in 2000, American Airlines is a 3-Star Airline. Star Grading awarded to airlines supplying a fair quality public presentation that conforms to an industry average when assessing all areas of competitive ranking.3 Star ranking signifies a satisfactory beat of core Product across most kick the bucket categories moreover may reflect less consistent standards of Staff benefit / Product delivery either Onboard or in the Airport environments. Vision, Mission, Goals and set of the Company Vision Customer Commitment American Airlines is in business to provide safe, depgoalable, and friendly air transportation to our customers, along with numerous think services. We are dedicated to make every flight you take with us something special. Mission an d GoalsAt American Airlines, we Evaluate products and services on their merits, liberal fair and impartial consideration to all suppliers Award contracts based on the highest quality and best delivery combined with the most competitive woo to the corporation Review constantly the performance of our suppliers and contractors to enhance their ability to provide products and services that exceed industry standards Assure inclusion of minority and women-owned companies in procurement and construction opportunities across American Airlines. VALUES The Company is committed to hold backing the highest standards of business ethics and complying with both the letter and the spirit of the law in everything that we do and in every country in which we do business. Doing so entrust similarly maintain the hard-earned respect that we discombobulate established over the years with our customers. Consequently, employees are prohibited from participating in or condoning extrajudicial or u nethical activity. Remember that illegal acts by employees can appeal the company jillions of dollars in fines, and the penalties for corporations convicted of federal crimes are severe.And employees who violate the companys ethical standards will be subject to disciplinary action up to and including termination. To ensure compliance with this company policy, we claim adopted these Standards of Business discharge for all employees. These Standards withal apply to all agents, consultants, contractors, and another(prenominal)s when they are representing or playacting for the company. We expect our vendors and suppliers to be guided by these principles. We have developed a Business Ethics & Compliance Program to educate you about the laws that continue our business and to provide the necessary channels to seek advice and report come-at-able misconduct.(www. aa. com) Quality Goods and returns Marketed in the Global Economy American Airlines sources the best quality products an d services to provide to our customers. Aside from their flight, car, hotel, vacation package and journey reservations, they also have the following services and products -Net SAAver and Special Offers -Fare Sales -Special Offers (Bonus Miles and serving and Great Savings) RSS overhaul Really Simple Syndication is a technology for overlap and distributing the latest web content such(prenominal) as fares, news, and offers.Its an easy mien to receive up-to-date information without having to search the Internet. -Last Minute Packages Bookings -Email Subscription Service AAdvatage Service The AAdvantage program is Americans travel awards program. It was the original travel awards program, established more than 20 years ago, and today is the worlds largest program. -Admiral Club Membership There are some people that are impossible to shop for and for them, theres the Admirals Club membership or the Admirals Club One-Day Pass. Its thoughtful, inspired, and a gift that they will not only use, but enjoy as well.-Offer Gift Card -Trip insurance Offer acquire a flight shouldnt trigger un payable stress. When customers purchase Trip Insurance through Access America, they can receive a re entrepot for the pre-paid, non-refundable fragment of they travel costs should your trip be cancelled or disrupt for a covered reason. The AmericanAirlines Credit Card (no annual fee) -TrAAvel Perks program which is a travel club with some fantastic member benefits. - Business ExtrAA program which offers more variety, more choice and more flexibility than any other airline incentive program for businesses.- bodied Booking American Airlines is leading the federal agency in providing practical, cost-efficient solutions for managing incorporate travel booking with CorporateAAccess. comSM. They have designed a functional, easy-to-use online booking product at the request of many corporate customers, one that brings the best of business travel planning unneurotic in one web sit e. The AmericanAirlines AAirpass program protects the customers against fare changes and helps them manage their travel by providing prepaid unrestricted air travel at a immovable rate all while they enjoy VIP privileges and benefits.With this, they can travel anytime, even at a moments notice, to any of the more than 250 worldwide destinations served by American Airlines, American Eagle, and AmericanConnection, including the U. S. , Canada, Europe, Japan, the Caribbean, Central and South America, and Mexico. -Incentive Programs AmericanAirlines Incentive voyage products support all of their promotional objectives from acquiring new customers to instilling consumer truth to rewarding employee performance. Destinations and Routes of American AirlinesAmerican Airlines fly in 10 major destinations including Africa, Asia, Australia/ new-made Zealand, Carribean, Central America, Europe, Eurasia, Middle East, North and South America. Its worldwide destinations include Dallas/ out W orth, India-Delhi, Ireland- Dublin and Shannon, Japan-Tokyo, Norfolk- Virgina and Shanghai, China. Shares Of AMR Common Stock Based on the Corporate argue Re strike, AMR Corporation allows 4. 5 part fourth-year Convertible Notes due 2024 have become convertible into shares of AMR common origin.As provided in the indenture under which the Notes were issued, the Notes have become convertible because the sale price of AMRs common stock for at least 20 trading days in a period of 30 consecutive trading days terminal on the last trading day of the calendar quarter ended Dec. 31, 2006, was great than 120 percent of the conversion price per share of AMR common stock. The Notes are convertible into common stock at the conversion rate qualify in, and otherwise in accordance with the terms of, the Notes and the indenture under which the Notes were issued, and they will remain convertible for so long as they are outstanding.Financial profitability of the Company for the Past Three Year s According to AP fella Press, AMR Corporation inform that they loss $387 Million in the fourth quarter of 2004, or $2. 40 per share. This compares to last years fourth quarter loss of $111 million, or $0. 70 per share. For the year, AMR posted a net loss of $761 million, compared to 2003s loss of $1. 2 trillion. quaternary quarter 2004 special items checked a net gain of $86 million, or $0. 54 per share, and primarily included a $146 million gain on the sale of Americans care in Orbitz, $42 million in severance charges, and $21 million in aircraft charges.Despite its profit loss, I can still affirm to the fact that the company is financially profitable. According to AP Associate Press dated July 19, 2006, American Airlines profit rise sharply. It ahs been further reported that a sharply higher profit for the second quarter, helped by replete airplanes and higher fares at the start of the peak summer travel season. AMR tell it earned $291 million, or $1. 14 per share, in the three months ended June 30, up from $58 million, or 30 cents a share, a year ago. receipts rose 12. 5 percent to $5. 98 billion from $5.31 billion a year ago and slightly higher than the $5. 93 billion that analysts had expected. AMR increase its property and short-run investments to more than $5. 1 billion, excluding restricted sense of balances. The buildup is a bequest of the companys brush with bankruptcy in 2003. The above facts by AP Associate Press only proved the financial profitability of the company. hedging Technique and Stategic Plans The company used a classic sort of hedge. It is also known in the industry as a pairs trade due to the trading on a pair of related securities.American Airlines oneworld is a hedging strategy wherein they made partnership with the seven of the worlds leading airlines Aer Lingus (through March 31, 2007), British Airways, Cathay Pacific Airways, Finnair, Iberia, LAN1 and Qantas Airways. The investors of American Airlines become more soph isticated of use various models. These strategies protect the company in currency fluctuation and it find out for a spread between market value and theoretical or true value, and attempt to extract profits when the values converge.AA has also a Customer Service Plan which is one of their strategic moves. This Customer Service Plan addresses a number of the service goals they have defined. This plan includes lowest fare availability, baggage delivery, baggage liability, guaranteed fares, ticket refunds, accommodation of customers with special needs, crucial customer needs during extraordinary delays, etc. They are constantly reevaluating their customer service goals, and they intend to update this Customer Service Plan when appropriate.Every customer is primal to American Airlines and American Eagle. The customers safety, comfort, and convenience are their most important concerns. Human imagination Management American Airlines supports the communities they serve throughout the w orld, bringing people together and providing opportunities for economic improvementmaking American a good neighbor. They are committed to diversity. With diversity comes opportunities for achiever which are good for their employees, their customers, communities, and ultimately their business.They also do more than posit our commitment to diversity. Their commitment is displayed in numerous ways and frequently sets the standard for other companies. Human Resource Management and Employee Resource Groups are an important part of AMRs efforts to foster an inclusive work environment. Through their Human Resource Management and Employee Resource Groups, they have created opportunities for employees to have a voice in business, support each other and share their unique perspectives, cultures and experiences with employees.Issues of Employees Regarding Their Compensation Based on the States Today dated June 22, 2004, officers of American Airlines, along with nitty-gritty leaders and empl oyees from all work groups rallied against the company regarding pension amend. The company, on behalf of its 80,000 employees and together with its unions, also placed a full-page ad in USA Today. The ad thanks Congress for doing their part to support pension reform legislation that makes funding employee pensions more affordable and more flexible without the transpose of these obligations to the judicature. Citing a reduction of $4 billion in annual operational costs through operational and efficiency improvements and changes to wages, benefits and work rules, the ad also underscores that American Airlines, its employees and its unions have made sacrifices and are working together to do their part to ensure a profitable company in sound out to improve shareholder returns, build financial stability and help maintain our defined benefit pension plans. Commitment Towards DiversityAmerican Airlines proudly support and aid employee involvement in any of their Employee Resource Groups such as black Employee Resource Group, Asian Cultural Association, Caribbean Employees, Christian Resource Group, Employees with Disabilities, Gay, Lesbian, Transgender and Bisexual Employees, Indian Employees, Jewish Resource Group, Latin Employee Resource Group, Muslim Resource Group, indispensable American Employee Resource Group, Women in AAviation, Work and Family Balance, 40 Plus/Senior Employees.They value a just and fair treatment of their employees in afield or wherever parts of the world. Plans for Expansion Based on Corporate Press Release dated March 30, 2007, AMR Corp. , the parent company of American Airlines, Inc. , provides an update on actions taken in the first quarter of 2007 as part of its ongoing efforts to strengthen its balance sheet and build a stronger financial foundation.AMR said that American Airlines has paid in full the $285 million principal balance of its senior secured revolving credit readiness, which had been fully drawn since its geolo gical formation in December 2004. AMRs $444 million term loan facility remains outstanding. The Company said that the revolving credit facility may be redrawn, subject to certain conditions, and repaid from time to time depending on various factors, such as economic and industry conditions and the Companys financial condition. AMR anticipates ending the first quarter of 2007 with approximately $5.8 billion in cash and short-term investments, including a restricted balance of nearly $500 million, compared to a cash and short-term investment balance of $4. 8 billion, including a restricted balance of $510 million, in the first quarter of 2006. AMR also said that it expects to complete by mid-April the refinancing of $350 million in municipal bonds that originally were issued in 1990 to help fund the development of Americans Alliance Maintenance and Engineering Base in Fort Worth, Texas .The closing of the transaction is subject to certain government approvals. The refinanced bonds, to be issued by AllianceAirport Authority, Inc. , will have a blended interest rate of 5. 46 percent, down from a rate of 7. 5 percent in the current bonds, and a final maturity of Dec. 1, 2029. AMR estimates that by salaried down the revolving credit facility balance, prepaying the aircraft debt and refinancing the maintenance facility bonds, as draw above, it will eliminate approximately $15 million of its annual net interest expense.Other examples of AMRs balance sheet improvement include AMR has increase more than $1. 1 billion through three equity issuances in the past 17 months, including the sale of 13 million new shares in January that raised approximately $500 million. AMR reduced its total debt, which includes the principal arrive of airport facility tax-exempt bonds and the present value of aircraft operating lease obligations, to $18.4 billion at the end of the fourth quarter of 2006, compared to $20. 1 billion a year earlier. The Company expects to end the first qua rter of 2007 with total debt of approximately $17. 6 billion. AMR reduced its net debt, which is defined as total debt less unrestricted cash and short-term investments, from $16. 3 billion at the end of 2005 to $13. 6 billion at the end of 2006. The Company expects to end the first quarter of 2007 with net debt of approximately $12. 3 billion.