Assessing Strategy at American Airlines: Canceled Flights, Labor Shortages, and a Government Bailout

Assessing Strategy at American Airlines: Canceled Flights, Labor Shortages, and a Government Bailout

  • Case
  • Teaching Notes
Abstract

As travelers returned to the skies this summer, American Airlines announced it would be canceling hundreds of flights, citing the financial struggles caused by the pandemic that contributed to the airline implementing massive layoffs last year. The announcement was swiftly followed by criticism from labor advocates, industry experts, and frustrated customers facing travel delays and increased ticket prices. The critics called the company out for poor decision-making, particularly considering the significant USD 7.5 billion bailout American Airlines had received from the federal government and the USD 10 million compensation its CEO was still earning at the time. This case asks students to analyze American Airlines’ operational and labor struggles within the context of the pandemic and the influx of capital it received from the government.

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