Question

Your client is American Airlines, the world’s largest airline by much metrics including revenue, fleet size, and destinations. Recently, they have struggled with customer satisfaction, ranking last in the Wall Street Journal’s review, and they have faced accusations of intentionally delaying flights because of labor disputes. This, along with many other factors, has resulted in a 50% decrease in their market capitalization since their peak in 2018. They are looking to improve customer satisfaction this year and to develop new initiatives that will increase their profitability. Based on your analysis, market research, case studies, your understanding of American’s current position, and any other research, recommend (1) how American can increase customer satisfaction and (2) what new initiatives they should consider to increase their future profitability. THINK OUTISDE THE BOX.

Answer 1

1. One of the main reasons of Customer dissatisfaction with American airlines is due to its non-reliability in recent times.

in 2018, American airlines was 7th in terms of On-time performance amoung 10 US airlines. It cancelled 1.5% of all its flights which is far more than its competitor Delta airlines which only cancelled 0.2% of its departures; others in business such as United had a cancellation rate of 0.5%.

2. Profitability increase-

• American Airlines in close connection to its Customer satisfaction, needs to improve its operational efficiency. Cancelled flights is a cost both in terms of lost revenue and negative word of mouth from customers.
• Better marketing- In the age of social media, an ad campaign themed around "The World’s Greatest Flyers" telling customers on how to behave had serious backlash and should be avoided. The marketing department should focus on highlighting the company's eagerness to provide service and improve customer experience on it flights.
• Tying up with corporate - Company employees tend to fly out a lot for business purposes and can have significant revenue for the firm