American Airlines SWOT: high leverage overshadows its strengths

Premium Analysis

American Airlines is in the final stages of its merger with US Airways, after reaching major milestones that included merging more than 1,300 IT systems, moving its pilots and aircraft onto a single operating platform, and completing the rebanking of strategic hubs in Miami, Dallas and Chicago.

The airline enjoys the benefit of operating the youngest fleet among its large US global network peers, and has risen to take the title of the largest US domestic airline, just passing Southwest in US market share.

But despite those achievements and positioning, American’s financial leverage is significantly higher than its peers, and the company faces short term revenue pressure that could affect the lofty financial targets that it has set for itself.

This report examines American’s strengths, weaknesses, opportunities and threats.

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