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The main issue of this case is the lack of profits of the airline industry an industry that should be more than profitable due to the large amount of customers the necessity of using airlines services and the high prices charged by most of these airlinesWhat we are going to deal with is why is this happening And how is American airlines dealing with this problemTo be able to discuss how American airlines wants to regain profitability we must identify and analyse different issues such as the companys background the airline industry as a whole the demand for air travel the marketing strategies the distribution systems pricing policies etcAmerican Airlines prime objective is to bring back value to air travel through stimulating business travel lowering prices etc So in other words American Airlines main objective is to become as profitable as possible To understand better the companys objectives we first have to focus on the companys background this way we will find out why the airline is not as profitable as it should and what kind of a change is neededAmerican Airlines had been the largest airline in the United States for a long time In 1990 and 1991 due to a recession and the Gulf War demand for air travel dropped drastically for this reason fare wars started and all the airlines incurred massive losses 34- The Airline industry and the marketThe airline industry is large specially in the United States mainly due to the Deregulation of the industryIn 1938 the Civil Aeronautics Board was created to control the growth of the air transportation industry This board had the authority to control entry exit prices and methods of competition In the late 1970 this structure was found inefficient and in 1978 deregulation took place Due to the deregulation of the industry competition intensified prices dropped and the number of people travelling increased Many new companies emerged and regional airlines saw deregulation as an opportunity
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