Distribution At American Airlines Essay

American Airlines is a major United States airline. It was formed in 1930 as a passenger airline and merged with different carriers since its formation.American Airlines operations grew rapidly after World fight II. In 1921, Americans corporate predecessor had hardly five small airplanes for transporting airmail. In 1946, American ordered 220 new planes.1952 American introduced the Magnetronic Reservisor, a mechanical console installed on each desk to help automatize inventory control. The Reservisor offered major productivity improvements A trial in the Boston reservations office served an additional two hundred passengers daily, with 20 fewer reservations staff.American and IBM collaborated on the design of an improved inventory management system, ultimately called the Semi-Automated affair Reservations Environment (cavalry sword). IBM provided the hardware, while American and IBM jointly built the software. The initial investment was comparable to half a dozen Boeing 707 je t airplanes.Competitors make their own scattering system and later, certain circumstances open the diligence to Global Distribution System allowing AAs own system to be access by those customers of competitors. measure CONTEXTIn year 2006, when American Airlines faced the impending expiration of its three-year contract with its four then(prenominal) existing GDS.POINT OF VIEWLead negotiator Charlie Sultan and co-lead negotiator Chris Degroot.STATEMENT OF THE PROBLEMAmerican Airlines was unable to shoulder the fees set by GDS due to struggled with fuel prices and increased competition from new entrants.OBJECTIVES must(prenominal)To continue attending to customers requirements as well as preserving the relationship with transit agents. To maintain easiness in accessing American Airlines services through supporting their existing GDS. To overcome mathematical threats brought by the changing environment (fuel prices and new airline entrants).WantsTo become the leader company in ai rline industry.To obtain more good intended for supporting the database services and other related activity. To preserve the trust given to them by their customers as well as their partner travel agencies.AREAS OF CONSIDERATION (SWOT ANALYSIS)StrengthsOne of the pioneer airlines to have an electronic distribution system (SABRE). Expertise in airline industry proven by their years of operation overcoming ago challenges,WeaknessesUnable to maintain their existing GDS (Global Distribution System) when it comes to its expenses. Not able to anticipate future problems.OpportunitiesSince they already collaborated with IBM with their SABRE and obtained knowledge in software development, they may expand their business of having an integrated airline services and control in developing software. Opportunities for growth in the industry.ThreatsThe implementation of artificial lake Premium policy may answer to travel agencies switching to other airlines. Possible new entrants in the airlin e industry might be more technology-based and modern allowing American Airlines existing customers to consider switching services from them.ALTERNATIVE COURSE OF transactionACA1 Limiting American Airline GDS Involvement to One. This will enable AA to focus into one GDA only while taking actions into garnering solutions for acquiring funds in supporting the remaining GDS. For the meantime, while AA resolves the insufficiency, the company may not be able to sacrifice therelationship with its travel agents. ACA2 Pushing the Idea of Source Premium Policy. Although the risk will be losing of referrals with travel agencies, the idea is still essential. It is letting the travel effect subscribing to AA shoulder the excess charges set by GDS. Travel agencies, anyway, may pass the charges to customers who is willing fully gestate AAs policy. ACA3 Partnerships with Existing and long-familiar Travel Agencies. This will strengthen the relationship between AA and travel agencies and create a mutual understanding. AAs experience through the years could guarantee the travel sureness a continuous growth of the industry. On the other hand, the travel agency could put trust to AA and be able to work for AAs continue offering of services.RECOMMENDATIONThe student recommends ACA3 Partnerships with Existing and Well-Known Travel Agencies.ACTION PLANIn doing the recommended alternative course of action, the following actions should be fully utilise effectively. 1. Create a plan for the possible business structure that may arise. That may include radiation pattern on how will be a partnership being structured. 2. Make a draft of possible guidelines on both parties in partnerships. The embodiments should include mutual benefit. 3. Seeking of trusted and well-known travel agencies and doing a background check on the prospects. 4. Conducting a meeting with the travel agencies that has been chosen. In a meeting, AA should effectively comport the agency, stating the mutual ben efit. 5. AA should allow the agency to revised or add on the guidelines in setting the conditions for he partnership. 6. Agreeing party should also consider the existing AA business policy. AA should also give a favorable condition to the agencies. 7. Executing the planned structure in the business with the official travel agency partners.