(USA) American Airlines @·AIRCRAFTUBE

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American Airlines

American Airlines, Inc. (AA) is a major U.S. airline owned by AMR Corporation, headquartered in Fort Worth, Texas. It operates an extensive international and domestic network, with scheduled flights throughout North America, the Caribbean, South America, Europe, and Asia/Pacific. Dallas/Fort Worth International Airport is the airline's largest hub, with American Airlines and AMR's regional carrier American Eagle accounting for about 85% of the traffic and 83% of the landing fees at the airport and traveling to more destinations than from its other hubs. The airline operates maintenance bases at Tulsa (TUL) and Fort Worth Alliance (AFW); the latter was announced to close by December 2012.

Its name notwithstanding, American Airlines is not a flag carrier, as that term is generally used in commercial aviation. Its subsidiary shares its name with American Eagle, and operates much of the regional carrier's flights; since November 2012, the subsidiaries of SkyWest, Inc., SkyWest Airlines and ExpressJet Airlines have also operated regional flights as American Eagle. In addition, AmericanConnection is the regional brand for codeshare flights operated by Chautauqua Airlines as of 2011.

In November 2011, AMR Corporation filed for Chapter 11 bankruptcy protection. Chairman and CEO Gerard Arpey stepped down and was replaced by company president Thomas W. Horton.

In February 2013, American Airlines and US Airways announced plans to merge, which would create the largest airline in the world. The terms of the merger have AMR shareholders owning 72% of the company and US Airways shareholders owning the remaining 28%. The combined airline is to carry the American Airlines name and branding; the new publicly traded holding company will be named American Airlines Group Inc. On August 13, 2013, the merger was faced by a civil suit filed by the U.S. Justice Department, six state attorneys general, and the District of Columbia over antitrust concerns. American Airlines vowed to continue the merger and fight against the civil suit.

Early history

American Airways was developed from a conglomeration of 82 small airlines through acquisitions in 1930 and reorganizations: initially, American Airways was a common brand by a number of independent carriers. These included Southern Air Transport in Texas, Southern Air Fast Express (SAFE) in the western US, Universal Aviation in the Midwest (which operated a transcontinental air/rail route in 1929), Thompson Aeronautical Services (which operated a Detroit-Cleveland route beginning in 1929) and Colonial Air Transport in the Northeast. Like many early carriers, American earned its keep carrying US Mail.

In 1934 American Airways Company was acquired by E.L. Cord, who renamed it "American Air Lines". Cord hired Texas businessman C.R. (Cyrus Rowlett) Smith to run the company. Smith worked with Donald Douglas to develop the DC-3, which American Airlines was first to fly, in 1936. American's DC-3 made it the first airline to be able to operate a route that could earn a profit solely by transporting passengers; other carriers could not earn a profit without US Mail. With the DC-3, American began calling its aircraft "Flagships" and establishing the Admirals Club for valued passengers. The DC-3s had a four-star "admiral's pennant" outside the cockpit window while the aircraft was parked.

American Airlines was the first to cooperate with Fiorello LaGuardia to build an airport in New York City and became owner of the world's first airline lounge at the new LaGuardia Airport (LGA), known as the Admirals Club. Membership was initially by invitation only, but a discrimination suit decades later changed the club into a paid club, creating the model for other airline lounges.

Post war

After World War II American acquired American Export Airlines, renaming it as American Overseas Airways, to serve Europe. AOA was sold to Pan Am in 1950. AA launched another subsidiary, Líneas Aéreas Americanas de Mexico S.A., to fly to Mexico and built several airports there. American Airlines provided advertising and free usage of its aircraft in the 1951 film Three Guys Named Mike. Until Capital merged into United in 1961 AA was the largest American airline, which meant second-largest in the world, after Aeroflot.

In August 1940 American scheduled flights to 44 airports; in August 1953 to 66, in April 1968 to 47 and in November 1978 to 68.

American Airlines ordered British-built de Havilland Comets; the orders were cancelled when the Comets were found to suffer serious metal fatigue. American Airlines introduced transcontinental jets with Boeing 707s on January 25, 1959. With its 707s American shifted to nonstop coast-to-coast flights, although it maintained feeder connections to cities along its old route using smaller Convair 990s and Lockheed Electras. American invested $440 million in jet aircraft up to 1962; launched the first electronic booking system, Sabre, with IBM (the basis of today's Travelocity); and built a terminal at Idlewild (now JFK) Airport in New York City, which became the airline's largest base. Vignelli Associates designed the AA eagle logo in 1967. Vignelli attributes the introduction of his firm to American Airlines to Henry Dreyfuss, the legendary AA design consultant. The logo was in use until January 17, 2013.

In 1970 American Airlines had flights from St. Louis, Chicago, and New York to Honolulu and on to Sydney and Auckland via American Samoa and Nadi. In 1971, American acquired Trans Caribbean Airways. On March 30, 1973 American became the first major airline to employ a female pilot when Bonnie Tiburzi was hired to fly Boeing 727s. American Airlines has been innovative in other aspects, initiating several of the industry's major competitive developments including computer reservations systems, frequent flyer loyalty programs and two-tier wage scales.

American Freighter

During the 1970s, through to the 1980s, American Airlines operated a wholly owned cargo-only subsidiary called American Freighter. American Freighter flew flights with 707's and 747's that had previously belonged to American Airlines.

1980s–90s

After moving its headquarters to Fort Worth, Texas from New York City in 1979, American Airlines changed to a hub-and-spoke system in 1981, opening hubs at DFW and Chicago O'Hare. Led by its new chairman and CEO, Robert Crandall, American began flights from these hubs to Europe and Japan in the mid-1980s.

In the late 1980s, American Airlines opened three hubs for north-south traffic. San Jose International Airport was added after American purchased AirCal. It built a terminal and runway at Raleigh-Durham International Airport for the growing Research Triangle Park nearby and to compete with USAir's hub in Charlotte/Douglas International Airport. Nashville International Airport was also a hub. In 1988, American Airlines received its first Airbus A300B4-605R aircraft.

In 1990, American Airlines bought the assets of TWA's operations at London Heathrow for $445 million, giving American a hub there. The US/UK Bermuda II treaty, in effect until open skies came into effect in April 2008, barred U.S. airlines from Heathrow with the sole exceptions of American Airlines and United Airlines.

Lower fuel prices and a favorable business climate led to higher profits in the 1990s. The industry's expansion was not lost on pilots who on February 17, 1997 went on strike for higher wages. President Bill Clinton invoked the Railway Labor Act citing economic impact to the United States, quashing the strike. Pilots settled for wages lower than their demands.

The three new hubs were abandoned in the 1990s: some San Jose facilities were sold to Reno Air, and at Raleigh/Durham to Midway Airlines. Midway went out of business in 2001. American Airlines purchased Reno Air in February 1999 and integrated its operations on August 31, 1999, but did not resume hub operations in San Jose. American discontinued most of Reno Air's routes, and sold most of the Reno Air aircraft, as it did with Air California 12 years earlier. The only remaining route from the Air California and Reno Air purchases is from San Francisco to Los Angeles.

During this time concern over airline bankruptcies and falling stock prices brought a warning from American's CEO Robert Crandall. "I've never invested in any airline", Crandall said. "I'm an airline manager. I don't invest in airlines. And I always said to the employees of American, 'This is not an appropriate investment. It's a great place to work and it's a great company that does important work. But airlines are not an investment.'" Crandall noted that since airline deregulation of the 1970s, 150 airlines had gone out of business. "A lot of people came into the airline business. Most of them promptly exited, minus their money", he said.

Miami International Airport became a hub after American Airlines bought Central and South American routes ("El Interamericano") from Eastern Air Lines in 1990 (inherited from Braniff International Airways but originated by Panagra). Through the 1990s, American Airlines expanded its network in Latin America to become the dominant U.S. carrier in the region.

On October 15, 1998, American Airlines became the first airline to offer electronic ticketing in the 44 countries it serves.

In 1999, American Airlines, British Airways, Cathay Pacific, Canadian Airlines, and Qantas founded the global airline alliance Oneworld.

2000s

Robert Crandall left in 1998 and was replaced by Donald J. Carty, who negotiated the purchase of the near bankrupt Trans World Airlines (it would file for its third bankruptcy as part of the purchase agreement) and its hub in St. Louis in April 2001.

American Airlines began losing money in the economic downturn that followed the September 11, 2001, attacks (in which two of its planes were destroyed). Carty negotiated wage and benefit agreements with the unions but resigned after union leaders discovered he was planning to award executive compensation packages at the same time. This undermined AA's attempts to increase trust with its workforce and to increase its productivity. The St. Louis hub was also downsized.

In 2002, the airline received a 100% rating on the first Corporate Equality Index released by the Human Rights Campaign in 2002 and has maintained their rating in respect to policies on employees.

AA has undergone additional cost-cutting, including rolling back its "More Room Throughout Coach" program (which eliminated several rows of seats on certain aircraft), ending three-class service on many international flights, and standardizing its fleet at each hub (see below). However, the airline also expanded into new markets, including Ireland, India and mainland China. On July 20, 2005, American announced a quarterly profit for the first time in 17 quarters; the airline earned $58 million in the second quarter of 2005.

AA was a strong backer of the Wright Amendment, which regulated commercial airline operations at Love Field in Dallas. On June 15, 2006, American agreed with Southwest Airlines and the cities of Dallas and Fort Worth to seek repeal of the Wright Amendment on condition that Love Field remained a domestic airport and its gate capacity be limited.

On July 2, 2008, American announced furloughs of up to 950 flight attendants, via Texas' Worker Adjustment and Retraining Notification Act system. This furlough is in addition to the furlough of 20 MD-80 aircraft. American's hub at San Juan, Puerto Rico's Luiz Muñoz Marin International Airport, will be truncated from 38 to 18 daily inbound flights, but the carrier will retain service in a diminished capacity.

On August 13, 2008, The Kansas City Star reported that American would move some overhaul work from its Kansas City, Missouri, base. Repairs on Boeing 757s will be made in Tulsa, Oklahoma, and some 767 maintenance will move there as well; one, possibly two, Boeing 767 repair lines will be retained at Kansas City International Airport. The narrow-body repair hangar will be shut. The city's aviation department offered to upgrade repair facilities on condition that the airline maintain at least 700 jobs.

In August 2009, American was placed under credit watch, along with United Airlines and US Airways. All Airbus A300 jets were retired by the end of August and are currently stored in Roswell, New Mexico.

On October 28, 2009, American notified its employees that it would close its Kansas City maintenance base in September 2010, and would also close or make cutbacks at five smaller maintenance stations, resulting in the loss of up to 700 jobs. American closed its maintenance base at Kansas City (MCI) on September 24, 2010.

American Airlines has had repeated run-ins with the FAA regarding maintenance of its MD-80 fleet (the company is the single largest operator of the craft); the costs associated with operating these jets has affected American's bottom line. American Airlines canceled 1,000 flights to inspect wire bundles over three days in April 2008 to make sure they complied with government safety regulations. This caused significant inconvenience to passengers and financial problems for the airline. American has begun the process of replacing its older MD-80 jets with Boeing 737s. The newer MD-80s will continue to serve until the recently ordered Airbus A319s, A321s and Boeing 737-800s are delivered.

In September 2009, the Associated Press and The Wall Street Journal reported that American was accused of hiding repeated maintenance lapses on at least 16 MD-80s from the FAA. Repair issues included such items as faulty emergency slides, improper engine coatings, incorrectly drilled holes and other examples of shoddy workmanship. The most serious alleged lapse is a failure to repair cracks to pressure bulkheads; the rupture of a bulkhead could lead to cabin depressurization. It is also alleged that the airline retired one airplane in order to hide it from FAA inspectors.

On September 12, 2009, American Airlines' parent company, AMR Corporation announced that they were looking into buying some of the financially struggling Japan Airlines. AMR is not the only company planning to buy a stake in the airline: rival Delta Air Lines was also looking into investing in the troubled airline, along with Delta's partner Air France-KLM. Both Delta and AF-KLM are part of SkyTeam, Oneworld's alliance rival. Japan Airlines called off negotiations of the possible deal with all airlines on October 5, 2009.

On October 21, 2009, Gerard Arpey, the CEO of American Airlines, said the airline and its Oneworld alliance of global airlines remains committed to a partnership with Japan Airlines, as long as the carrier remains a major international carrier.

On November 18, 2009, Delta Air Lines, with help from TPG, made a bid of $1 billion for JAL to partner with them. Two days later, reports came from Japan that AA and TPG had teamed up and made a $1.5 billion cash offer to JAL, which they might consider doing.

On February 9, 2010, Japan Airlines officially announced that it would strengthen its relationship with American Airlines and Oneworld.

On January 11, 2011, both JAL and American Airlines announced that they would start their joint-venture operation starting April 1, 2011.

2010s

In early July 2010, it was reported that American Airlines was trying to find buyers for its regional airline American Eagle. The move followed Delta Air Lines and its spin off of its wholly owned regional airlines Compass Airlines and Mesaba Airlines. In February 2010, the USDOT granted AA preliminary antitrust immunity to allow the airline to work with British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines on transatlantic routes. The partnership was officially approved by the USDOT on July 20, 2010. On October 1, American, British Airways, and Iberia launched their joint venture, enabling, among other things, frequent flyers to earn and redeem miles on each other's flights.

Less than a week after American's transatlantic joint venture was launched, the Department of Transportation gave preliminary approval to American's new transpacific joint venture with Japan Airlines on October 7, Japan gave final approval to the venture later that month and the immunity grant was finalized in early November 2010 On March 31, 2010, American and JetBlue announced a partnership regarding the interlining of routes between the airlines. 27 of JetBlue's destinations that are not served by American and 13 of American's international destinations from New York and Boston are included in the agreement. Also, American is giving JetBlue 8 slot pairs (a slot pair is one arrival slot and one departure slot) at Ronald Reagan Washington National Airport and 1 slot pair at Westchester County Airport. In return, JetBlue is giving American 12 slot pairs at JFK Airport.

On July 19, 2010, AA announced that by the end of 2010, flyers will be able to receive either AAdvantage miles or TrueBlue points on their interline itineraries connecting in JFK or Boston. Effective November 18, 2010, the two airlines will give the traveler miles in either program when flying on a qualifying route, regardless of whether the travels include an international connection. On February 16, 2010, American applied to the US Department of Transportation to begin nonstop service to Tokyo's Haneda Airport. American planned to begin service beginning October 1, 2010 from New York-JFK and Los Angeles with Boeing 777-200ER aircraft. On May 7, 2010, the US Department of Transportation tentatively awarded American Airlines the right to begin nonstop service from JFK Airport to Tokyo-Haneda, but denied American's bid to serve Haneda from LAX. American planned to begin service to Tokyo-Haneda from JFK on January 20, 2011; however, the airline decided to postpone the service until February 18, 2011 citing low booking demand. The airline will resume service from JFK to Haneda from June 1, 2012 (during that time the JFK-Narita route will be terminated).

On October 1, 2010, American announced that it will file an application to the US Department of Transportation to operate daily nonstop flights between Los Angeles and Shanghai, China. The airline was granted approval from the US DOT to begin the Los Angeles-Shanghai route on April 5, 2011. The airline is also considering on flying to Hong Kong and Guangzhou. Since late 2010, American Airlines has been involved in a dispute with two online ticketing agencies, Expedia and Orbitz. This relates to American's "Direct Connect" fare booking system for large travel agents, which Expedia claimed might raise costs and was less transparent for passengers. The Direct Connect allows American to exert more control over its distribution, save costs, and better sell ancillary services to its customers. In December 2010, American pulled its price listings from Orbitz, and on January 1, 2011, Expedia removed American Airlines' fares from its site.

On November 29, 2011, AMR Corporation filed for Chapter 11 bankruptcy protection. In July 2012, American announced capacity cuts due to the grounding of several aircraft associated with its bankruptcy and lack of pilots due to retirements. American's regional airline, American Eagle, will retire 35 to 40 regional jets as well as its Saab turboprop fleet. As of Summer 2012, American's unions are looking to merge with another airline. Reports are the possible merger partners AMR is considering are, US Airways, JetBlue, Alaska Airlines, Frontier Airlines, and Virgin America. Indeed, in a July 12 court filing US Airways said it supported an American Airlines request to extend a period during which only American could file a bankruptcy reorganization plan ("exclusivity period"); in the filing US Airways disclosed that it was an American Airlines creditor and "prospective merger partner. On August 31, 2012, US Airways CEO Doug Parker announced that American Airlines and US Airways had signed a nondisclosure agreement, in which the airlines would discuss their financials and a possible merger."

On September 18, 2012, the airline announced that it has notified more than 11,000 workers of possible job loss as part of its bankruptcy reorganization. It also said that it is cutting flights by one to two percent for the rest of September and October 2012. On October 25, 2012, the airline announced its plans to hire 2,500 pilots over two years. In a letter to employees, CEO Tom Horton said American Airlines will hire new pilots to staff new international and domestic routes. Company spokesman Bruce Hicks said that about 1,500 of the new hires would replace retiring pilots, or jobs that open up due to attrition. American has about 7,500 active pilots today. On December 7, 2012, the American Pilots Association, representing pilots of American Airlines, said that members voted to ratify a tentative agreement between the company and the union. On January 17, 2013, Horton unveiled American Airlines' new logo and brand image at the Dallas-Fort Worth International Airport. The new livery was introduced on the Boeing 737-800. The idea of modernizing American's brand image and logo came to fruition soon after the airline placed the largest aircraft order in aviation history.

On October 16, 2013, American Airlines announced that it will begin nonstop service from Dallas/Fort Worth International Airport to both Shanghai and Hong Kong as part the airline's continued expansion into the Asian market. The airline plans to launch the flights in the summer of 2014 and it will be the first ever nonstop route between Dallas/Fort Worth and China.

Merger with US Airways

On February 14, 2013, American Airlines and US Airways Group officially announced that the two companies would merge to form the largest airline in the world. In the deal, which is expected to close in the third quarter of 2013, bondholders of American Airlines' parent AMR will own 72% of the new company and US Airways shareholders will own the remaining 28%. The combined airline will carry the American Airlines name and branding, while US Airways' management team, including CEO Doug Parker, will retain most operational management positions. The headquarters for the new airline will be consolidated at American's current headquarters in Fort Worth, Texas. The merger will create the world's largest airline, which, along with United Airlines and Delta Air Lines, will control three-quarters of the U.S. market. Bankruptcy judge Sean Lane disapproved Tom Horton's $20 million golden parachute as being "inappropriate".

Antitrust lawyer Joseph Alioto has brought suit against American over the merger, in a suit representing 33 passengers and travel agents who claim the union would render American Airlines too large and also would cause fewer flights and lower quality service. American Airlines spokesman Mike Trevino called the lawsuit "baseless." On August 13, 2013, the United States Department of Justice, along with attorneys general from six states and the District of Columbia, filed a lawsuit seeking to block the merger, arguing that it would mean less competition and higher prices. Both American Airlines and US Airways said that they would fight the lawsuit and continue with their merger after regulatory approval.

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