Marketing Mix of American Airlines and 7Ps (Updated 2024)

The Marketing mix of American Airlines analyses the 7Ps of American Airlines, which includes the Product, Price, Place, Promotion, People, Physical Evidence, and Process of American Airlines. American Airlines is the subsidiary of its parent company, American Airlines Group. As the name suggests, it is a public limited company of American origins. This renowned company is associated with the aviation industry as it deals in national and international flights.

American Airlines is integral to Oneworld Alliance and coordinates schedules, services, and fares with its alliance partners. It was founded in 1926 but was able to commence its operations in the year 1936 on June 25. It faces competition from the following-

• Northwest Airlines
• Delta Airlines
• United Airlines

About American Airlines

• Type: Airline
• Industry: Transportation
• Founded: April 15, 1926
• Founder: C.R. Smith
• Headquarters: Fort Worth, Texas
• Area served: Worldwide
• Key people: Doug Parker (Chairman) and Robert Isom (CEO)
• Number of employees: 130,000

Marketing mix of American Airlines

In this article, we discuss the Marketing Mix of American Airlines, which includes the product, customer expectations, price, place, and promotions of American Airlines. Let us begin.

American Airlines Product Strategy

American Airlines is the largest airline globally regarding passenger traffic, fleet size, and kilometers flown. It operates in tandem with its regional partners to offer domestic and international services via six thousand and seven hundred flights daily on an average basis. By the end of the financial year 2018, American Airlines had a fleet of one thousand five hundred and thirty-six carriers, including McDonnell Douglas, Embraer, Boeing, and Airbus. It offers both direct and connecting flights to its passengers.

The product mix of American Airlines in 2024 is as follows (Source).

1. Passenger Flights: The core of American Airlines’ product mix. They offer domestic and international flights, with classes including Economy, Premium Economy, Business, and First Class. Each class offers different levels of comfort and amenities.
2. Cargo Services: American Airlines also operates cargo services besides passenger transport. This allows for the transportation of goods and freight to various destinations, both domestically and internationally.
3. Loyalty Program (AAdvantage): AAdvantage is American Airlines’ frequent flyer program. It rewards frequent passengers with points that can be redeemed for flights, upgrades, hotel stays, car rentals, and other products and services.
4. Admirals Club and Flagship Lounge: American Airlines’ airport lounges are available at numerous airports worldwide. They offer passengers a more comfortable waiting experience, with amenities like food, drinks, Wi-Fi, and shower facilities.
5. Co-branded Credit Cards: American Airlines offers co-branded credit cards in partnership with financial institutions. These cards allow customers to earn flight miles on everyday purchases.
6. Travel Partnerships and Alliances: American Airlines is a member of the Oneworld airline alliance and has partnerships with various other airlines and travel companies. This expands its service offerings internationally through code-sharing and joint ventures, providing customers with more destinations and a seamless travel experience.
7. Ancillary Services: These include options like priority boarding, extra baggage, seat selection, onboard Wi-Fi, and in-flight entertainment and meals. These services provide additional revenue streams for the airline.
8. Travel Insurance: American Airlines offers travel insurance, covering trip cancellations, delays, medical emergencies, and other travel-related contingencies.
9. Charter Flights: Apart from scheduled flights, they offer charter services for large groups and special events.
10. Maintenance, Repair, and Overhaul (MRO) Services: American Airlines also provides MRO services to other aviation clients, utilizing their extensive maintenance facilities and expertise.

This product mix enables American Airlines to cater to various customer needs and preferences while diversifying its revenue streams.

American Airlines Pricing Strategy

American Airlines has been ranked at the top in terms of revenue earned. It has targeted upper- and middle-class passengers who prefer punctuality and comfort as its target customers. The company has positioned itself as a premium airline but has adopted a differentiated pricing and distribution strategy for all its products. Prices depend on several factors, and American Airlines has fixed the prices per the services offered.

American Airlines employs a multifaceted pricing strategy to give a competitive advantage and maximize revenue and market share in a highly competitive industry. Here are the key components:

1. Dynamic Pricing: Utilizing advanced algorithms and real-time data, American Airlines adjusts its fares based on demand, competition, seasonality, and other market factors. This flexible pricing allows them to stay competitive and attractive to various customer segments.
2. Segmented Pricing: Recognizing the diversity in customer needs and willingness to pay, American Airlines offers differentiated pricing strategies for cabin classes (Economy, Premium Economy, Business, First Class) and ticket types (flexible, non-refundable, etc.). This strategy caters to both budget-conscious travelers and those seeking luxury.
3. Revenue Management: American Airlines optimizes the balance between load factor (the percentage of seats filled) and yield (average fare per passenger) through sophisticated revenue management systems. This approach to marketing management ensures profitability by maximizing revenue per flight.
4. Promotional Offers and Discounts: To stimulate demand during off-peak periods or in specific markets, American Airlines provides promotional fares, discounts, and limited-time offers. This strategy helps marketing efforts by attracting price-sensitive customers and maintaining market presence.
5. Loyalty Program Pricing: The AAdvantage program offers a tiered pricing strategy where frequent flyers earn points that can be redeemed for flights, upgrades, and other services. This incentivizes customer loyalty and repeat business, which is crucial in the airline industry.
6. Ancillary Revenue: Beyond ticket sales, American Airlines strategically prices ancillary services like baggage fees, seat selection, priority boarding, and in-flight amenities. This approach, after-sales service, allows for additional revenue streams while giving customers the flexibility to pay for only the services they value.

This pricing strategy, which combines flexibility, market responsiveness, customer segmentation, and revenue optimization, is critical for American Airlines to remain competitive in the dynamic airline industry.

American Airlines Place Strategy

American Airlines has spread its presence to most parts of the globe and has been ranked as the largest airline in terms of destination served. It reaches three hundred 150 destinations and serves more than 150 countries. American Airlines operates with its alliance partners Finnair, Iberia, and British Airways in the transatlantic market, with Japan Airlines and Cathay Pacific in transpacific routes and its domestic network of regional services via subsidiary and independent carriers under the American Eagle brand.

It carries maximum passenger traffic from Dallas/Fort Worth International Airport. The airline’s significant maintenance base is established at Tulsa International Airport, with another maintenance base at Tulsa International Airport, Pittsburgh International Airport, and La-Guardia Airport.

The company has its headquarters base at Centre Port in Texas and important hubs at Washington-National, Phoenix-Sky Harbor, Philadelphia, New York-La Guardia, New York-JFK, Miami, Los Angeles, Dallas/Fort Worth, Chicago-O’Hare and Charlotte. American Airlines served a well-trained staff, including one lakh twenty-two thousand employees in 2017. The distribution channel attracts customers of American Airlines, including buying tickets from its website, other portals, flight agents, and airport ticket counters.

American Airlines place strategy is as follows:

1. Extensive Global Network: American Airlines operates a vast network of routes, covering major cities across the United States and international destinations, ensuring accessibility and convenience for travelers worldwide.
2. Strategic Hub Locations: The airline strategically utilizes key hub airports like Dallas/Fort Worth, Charlotte, and Chicago O’Hare, which serve as central points for its operations and facilitate efficient passenger connections.
3. Partnerships and Alliances: Through its membership in the Oneworld alliance and various code-sharing agreements, American Airlines expands its reach, allowing passengers to travel to destinations beyond its direct routes.
4. Online and Mobile Presence: American Airlines invests in a robust online and mobile presence, including a user-friendly website, social media pages, and mobile app, making it easy for customers to book flights, check-in, and manage their travel plans.
5. Physical and Virtual Points of Sale: The airline maintains physical ticketing and customer service counters at airports and city locations while offering virtual channels, like call centers and online social media platforms, for ticket purchases and customer support.

American Airlines Promotion Strategy

American Airlines believes in marketing activities and has created several global ad campaigns to promote its brand. Ads are placed on onboard magazines, billboards, and in-flight. The company uses its official website to promote its products, services, and promotional activities. Offers and incentives are posted on its official site. American Airlines also uses other social- media platforms and portals like its Facebook page, Twitter account, and YouTube to remain in direct contact with its customers.

The airlines started an AAdvantage frequent flyer program in 1981, on May 1. It became the most extensive program in 2011, with over sixty-seven million members. Members can accumulate and later redeem the miles for tickets, obtaining discounted or free car rentals, upgrading airline services, merchandise, hotel stays, and other services. The most regular and active members can avail of free upgrades, priority upgrades, and particular check-ins.

American Airlines believes in participating in events and sponsorship programs to maintain its brand visibility. It is the title sponsor of American Airlines Arena and American Airlines Center, basketball venues. Several professional sports teams are also sponsored by this company, including New England Revolution, New England Patriots, Philadelphia Eagles, Dallas Mavericks, Dallas Cowboys, Chicago Cubs, and Carolina Panthers. It has some essential taglines to its name, like The World’s Greatest Flyers Fly American, Going Fir Great, The On-Time Machine, Something Special in the Air, and Be Yourself Nonstop.

Here are some key statistics of American Airlines

• American Airlines flew 165.68 million passengers in 2021 and has 123,400 employees.
• American Airlines Group has 1,432 aircraft, and its annual revenue was $29.88 billion in 2021
• American Airlines accounted for 19.5 percent of the domestic market share in 2021

This was all about the American Airlines Marketing mix by Marketing91.

American Airlines promotion and marketing strategy is as follows:

1. Targeted Marketing Campaigns: American Airlines leverages data-driven marketing to reach its target audience of potential customers through various channels like social media, email, and digital advertising, focusing on personalized offers and relevant messaging.
2. Loyalty Programs and Partnerships: The AAdvantage program and partnerships with hotels, car rental services, and other airlines provide exclusive deals, enhancing customer loyalty and encouraging repeat business.
3. Strategic Public Relations and Sponsorships: The company engages in public relations activities, marketing strategies, and sponsorships of major events and organizations, boosting brand visibility and reputation on a global stage.

Some Recent Video ads and Print ads of American Airlines are:

American Airlines People Strategy

The “People” component of the Service Marketing Mix for American Airlines involves various factors related to both the employees who deliver the service and the customers who receive it. This aspect is crucial in the airline industry, where customer service can significantly influence the travel experience. Here are several key points regarding the “People” element in the context of American Airlines:

1. Employee Training and Development: American Airlines invests in comprehensive training programs for its staff, including pilots, cabin crew, ground staff, and customer service representatives. This training focuses on safety, customer service excellence, and operational efficiency to ensure a positive experience for passengers.
2. Customer Service Staff: The airline’s customer service staff, both on the ground and in the air, play a pivotal role in interacting with passengers. Their professionalism, courtesy, and ability to handle inquiries and issues effectively are critical components of the airline’s service delivery.
3. Cabin Crew: The cabin crew are the frontline employees who directly interact with passengers during flights. Their demeanor, service delivery, and responsiveness to passenger needs significantly impact the customer experience.
4. Pilot and Technical Staff Expertise: The skills and expertise of pilots and technical staff are fundamental to the safety and reliability of the airline’s operations. Their competence also contributes to passenger confidence and satisfaction.
5. Customer Feedback and Engagement: American Airlines strongly emphasizes gathering and acting upon customer feedback. This feedback informs service improvements and employee training programs, ensuring that the airline’s service offerings meet or exceed customer expectations.
6. Diversity and Inclusion: The airline is committed to diversity and inclusion within its workforce, recognizing the value of having employees from various backgrounds and cultures. This diversity enhances the ability to cater to a global customer base with varying needs and expectations.
7. Employee Recognition Programs: Recognizing and rewarding employees for exceptional service and performance is part of American Airlines’ strategy to motivate staff and encourage high-quality service delivery.
8. Teamwork and Collaboration: Effective teamwork among all staff members, from ground operations to in-flight services, is essential for the smooth operation of flights and providing quality service to passengers.
9. Health and Safety Protocols: Especially in the wake of the COVID-19 pandemic, the health and safety protocols implemented by American Airlines affect both employees and passengers. Ensuring a safe environment is paramount for trust and confidence in the airline’s services.
10. Digital and Self-Service Options: The airline also focuses on digital innovation to improve customer service, including self-service kiosks, mobile app functionalities, and online check-in processes, reducing the need for direct interaction and making the travel process more efficient for passengers.

American Airlines Process Strategy

The “Process” component of the Service Marketing Mix for American Airlines refers to the procedures, mechanisms, and flow of activities by which services are consumed. This encompasses everything from ticket booking to the post-flight experience, highlighting the efficiency, customer convenience, and overall quality of service delivery. Here are key points regarding the “Process” element in the context of American Airlines:

1. Online Booking and Check-in: American Airlines offers a seamless online booking and check-in process through its website and mobile app, allowing passengers to purchase tickets easily, select seats, and check in for flights, thereby reducing wait times at the airport.
2. Mobile App Functionality: The airline’s mobile app provides functionalities such as flight tracking, mobile boarding passes, and updates on flight changes or delays, enhancing the customer experience through digital convenience.
3. Baggage Handling System: American Airlines utilizes an efficient baggage handling process to ensure that luggage is safely and promptly loaded onto flights and returned to passengers upon arrival, minimizing the chances of lost or delayed baggage.
4. Flight Operations: The process includes optimized flight scheduling, route management, and maintenance operations to ensure on-time departures and arrivals, crucial for customer satisfaction and operational efficiency.
5. Safety Procedures: Rigorous safety protocols are in place, including pre-flight checks, safety briefings, and emergency procedures, to ensure the well-being of passengers and crew at all times.
6. Boarding Process: The airline employs a structured boarding process, often based on group or seat assignments, to streamline the boarding of flights and reduce congestion at the gate.
7. In-flight Service Delivery: The process involves the provision of meals, beverages, and entertainment options during the flight, executed by trained cabin crew to enhance passenger comfort and satisfaction.
8. Customer Service and Support: Dedicated customer service channels, including call centers, social media, and airport service desks, are available for passengers to make inquiries, lodge complaints, or seek assistance, ensuring responsive and helpful support.
9. Loyalty Program: American Airlines’ AAdvantage program rewards frequent flyers with points that can be redeemed for flights, upgrades, and other benefits, encouraging repeat business and enhancing customer loyalty.
10. Feedback and Continuous Improvement: The airline has mechanisms to gather and analyze customer feedback through surveys, social media monitoring, and direct communications, allowing for continual service improvements based on passenger insights.
11. Health and Safety Measures: In response to health concerns, such as those highlighted by the COVID-19 pandemic, American Airlines has implemented enhanced cleaning, disinfection, and health screening processes to ensure passenger and staff safety.
12. Environmental Sustainability Practices: The process also includes efforts to reduce environmental impact, such as fuel-efficient flights, recycling programs, and initiatives to offset carbon emissions.

American Airlines Physical Evidence Strategy

The “Physical Evidence” component of the Service Marketing Mix refers to the tangible and intangible elements customers use to evaluate the service quality. For American Airlines, physical evidence shapes perceptions and experiences of the airline’s brand and services. Here are several key points regarding the physical evidence associated with American Airlines:

1. Aircraft Appearance and Cleanliness: The exterior and interior conditions of the aircraft, including cleanliness, upkeep, and branding elements, offer immediate visual and comfort cues to passengers about the airline’s quality standards.
2. Branding Elements: The company logo, color scheme, and design motifs seen on airplanes, staff uniforms, boarding passes, and marketing materials help reinforce the airline’s identity and contribute to a cohesive brand experience.
3. Lounges and Check-in Areas: The design, comfort, and amenities offered in American Airlines’ lounges (such as the Admirals Club) and check-in areas indicate the airline’s service level and attention to passenger comfort.
4. In-flight Amenities: Quality and presentation of in-flight amenities, including seats, entertainment options, meals, and complimentary items, are tangible evidence of the airline’s service offerings and commitment to passenger satisfaction.
5. Website and Mobile App Interface: The functionality, ease of use, and design of American Airlines’ website and mobile app are critical in providing a positive digital experience for customers managing their travel plans.
6. Boarding Passes and Luggage Tags: The design, material quality, and information clarity of boarding passes and luggage tags contribute to the efficiency and smoothness of the travel process, reflecting on the airline’s operational competence.
7. Staff Uniforms: The professionalism and consistency of staff uniforms worn by pilots, cabin crew, and ground staff contribute to the visual branding and signal the airline’s commitment to professionalism and service quality.
8. Signage and Information Displays: Clear, well-designed signage and information displays at airports, including gate information, directional signs, and flight status boards, help create a seamless passenger navigation experience.
9. Cleanliness and Maintenance of Facilities: The cleanliness and upkeep of airport facilities used by American Airlines, including gates, lounges, and restrooms, significantly affect the customer’s perception of the airline’s standards.
10. Safety and Security Measures: Visible safety procedures and security measures, including pre-flight instructions, the presence of security personnel, and the demonstration of emergency equipment, reassure passengers about their well-being.
11. Customer Service and Interaction: The airline’s staff’s demeanor, responsiveness, and helpfulness during interactions provide crucial non-physical evidence of the airline’s service quality and customer care ethos.
12. Testimonials and Customer Reviews: Shared experiences, reviews, and testimonials from past passengers serve as indirect physical evidence, influencing perceptions and expectations of potential customers.

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