American Airlines Case Study BUS 490 Strategy and Policy

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American Airlines Case Study

BUS 490 Strategy and Policy

American Airlines Background


In 1926, a young aviator named Charles A. Lindbergh stowed a bag of mail in his little DH-4 biplane and took off from Chicago for St. Louis. Later that day, he and two other pilots flew three plane loads of mail from St. Louis to Chicago (AMR Home Page).

At the time, Lindbergh was chief pilot of Robertson Aircraft Corporation of Missouri, which was the second aviation company to hold a U.S. airmail contract. It was one of scores of companies that eventually consolidated to form the modern-day American Airlines. The consolidation began in 1929, when The Aviation Corporation was formed to acquire young aviation companies, including Robertson. In 1930, The Aviation Corporation's airline subsidiaries were incorporated into American Airways, Inc. In 1934, American Airways became American Airlines, Inc (AMR Home Page).


It was in 1936 that American was the first airline to fly the Douglas DC-3 in commercial service.

By the end of the decade, American was the nation's number one domestic air carrier in terms of revenue passenger miles. On Feb. 16, 1937, American carried its one-millionth passenger. American Airlines began trading on the New York Stock Exchange on June 10, 1939 (AMR Home Page).


In 1944, American introduced the first domestic scheduled U.S. freight service with the DC-3. As the business grew, Douglas DC-4, DC-6A and DC-7 freighters were put into service in the 1940s and 1950s. From 1945 to 1950, American operated American Overseas Airlines (AOA), a trans-Atlantic division, which served a number of European countries. This was American's first European service. AOA was formed as a result of a merger between the international division of American and a company called American Export Airlines. AOA merged with Pan American World...