American Airlines - Pressures within the industry or the competition [Scandal] - Research Paper Example

These and other related operational lapses in physical fleet maintenance and other aspects of operations have resulted in many small and large problems for the company. For one, the regulators have levied very steep fines on American Airlines for the failures in maintenance of the fleets. Meanwhile, other operational lapses such as mishandled management of the relationship with key personnel has resulted in bad publicity for the airline. These breaches have legal dimensions moreover, in that the compromising of the security and well-being of passengers as stakeholders have legal consequences for American Airlines (Daily Mail Reporter; Cohn; Ahles; Gavett; David; Mutzabaugh; Infocom Group; Coffee; McCartney; Raymond). B. Industry Overview The state of the airlines industry and the pressures that are put to bear on American Airlines as it tries to stay afloat as an on-going and financially feasible concern is reflected in the most recent news and analyses with regard to the planned merger between American Airlines on the one hand and US Airways on the other. . Since that time, the stock has sunk and has been in a precipitous downhill trajectory, indicating difficult financial conditions within the firm and outside for the entire industry in general (Google).

All these translate to an operating environment that is marked by low margins and losses, difficult conditions and prospects for the medium term, and low confidence on the part of the investors with regard to the desirability of airlines as an investment vehicle, and bad prospects for all stakeholders in general, including employees and passengers. These translate to large pressures put on American Airlines to continue to push forward with investments to renovate and upgrade existing fleets and to keep the airplanes serviceable and airworthy.

The pressure is with regard to continuing to operate in an environment where continuing investments in fleet management and maintenance add to already soaring costs that thin margins and make it difficult for American Airlines and other players to turn a profit year in and year out. The recent bankruptcy filing is the icing on the cake and proof that American Airlines as it is currently constituted is unable to thrive in a pressure-packed industry and overall airlines business environment (Daily Mail Reporter; Cohn; Ahles; Gavett; David; Mutzabaugh; Infocom Group; Coffee; McCartney; Raymond).

From the perspective of the immense pressures in the industry for airlines to remain profitable and financially viable concerns in the wake of record losses spanning at least a decade, continuously thinning margins from growing costs and intense competition from other players that keep prices depressed, the problems and missteps of American Airlines can be placed in their proper perspective. One way to view