WestJet

An Analytical Overview
Alexander Di Giovanni, Annie MacLellan, Jenny Gillis, Josh MacIntyre, Tommy Grant

Executive Summary

This report will display the qualities and flaws of the WestJet Corporation, and will help determine whether or not investing in this company is a profitable business decision. This analysis contains information regarding the company profile and the organization of the company. It also displays how the corporation positions itself in the marketplace by examining the demand for the product, by estimating future demand, and by analyzing key competitors in the aviation industry and how they affect WestJet. This article also displays how factors in the broader environment, such as economic, government regulations, and demographic change, affect the corporation. Finally a SWOT analysis is provided in order to clearly illustrate the strengths, weaknesses, opportunities and threats of the company, and determine the value and profitability of investing in WestJet. The information provided in this report is taken from various credible sources, such as online academic journal article, business websites, newspaper articles, and government based websites.

Tommy Grant Josh MacIntyre Annie MacLellan Alexander Di Giovanni Jenny Gillis
WestJet Company Profile

WestJet Airlines Ltd was founded on 29 February, 1996 in Calgary, Alberta by Clive Beddoe, Mark Hill, Tim Morgan and Donald Bell. With 220 employees and 3 Boeing 737-200s, the company began offering flights to Vancouver, Kelowna, Calgary, Edmonton and Winnipeg. WestJet headquarters is located at 22 Aerial Place NE, in Calgary, Alberta. They offer several methods of contact for potential consumers by email, phone or their website, http://www.westjet.com. As of September 2009, WestJet employs 7500 WestJetters and offers flights to 66 destinations in Canada, the United States, Mexico and the Caribbean. With 81 Boeing 737s making approximately 383 flights per day, WestJet was named one of Canadas Most Admired Corporate Cultures in 2005, 2006, 2007 and 2008 by Waterstone Human Capitals Canadian Corporate Culture Study. WestJets vision is displayed clearly on their website: By 2016 WestJet will be one of the five most successful international airlines in the world providing guests with a friendly and caring experience that will change air travel forever. The strategic pla n from their official website shows their four pillars for long-term success: People and Culture Investing in and fostering the growth, development and commitment of our people Guest Experience - Consistently and continuously providing an amazing guest experience Revenue and Growth Achieving an average annual compound growth rate in available seat miles of 10 per cent Costs Achieving a targeted, sustainable profit margin that will be number one among North American airlines. WestJets board of directors includes: Clive Beddoe, Chairman of the Board (previously President and Chief Executive Officer); Brett Godfrey, co-founder of WestJet and CEO of Virgin Blue Airlines in Australia; Don Hougan, former First Officer and Captain and Pro-Active Communications Team (PACT) Chairman; Allan Jackson, President and CEO of ARCI Ltd., and Jackson Enterprises Inc.; Ron Brenneman, Executive Vice Chairman of Suncor Energy Inc., former President, CEO and director of Petro-Canada; Sean Durfy, President and CEO of WestJet;

Barry Jackson, retired Chair of Resolute Energy Inc. and Deer Creek Energy Ltd, former President, CEO and director of Crestar Energy Inc. Wilmont Matthews, retired Vice Chairman and Director of Nesbitt Burns Inc.; Larry Pollock, President and CEO or Canadian Western Bank and Canadian Western Trust; Arthur Scarce, non-executive Chairman of the Bank of Nova Scotia; and, Hugh Bolton, Chartered Accountant, non-executive Chair of EPCOR Utilities Inc. and Lead Director of Matrikon Inc. Financial information from Westjet Annual Financial Reports.

Financial Information:
2004 Sales Expenses Net Income (Loss) Total Assets Total Liabilities
1 055 260 000 981 459 821 (17 168 000)

2005
1 385 102 000 1 279 690 757 24 001 000

2006
1 765 084 000 1 517 954 849 114 676 000

2007
2 151 457 000 2 126 440 599 192 833 000

2008
2 549 506 000 2 550 265 859 178 135 000

1 877 000 000 1 020 000 000

1 180 000 000 670 000 000

2 727 000 000 1 461 000 000

2 984 000 000 1 442 000 000

3278 849 000 1 452 868 000

Market Demand Overview:

WestJet is a Canadian founded airline company that is preferred all over Canada, also receiving awards for Canadian Airline of the year for its industry in 2009. WestJet belongs to a Global Airline Industry that has forgone much development and technological improvement in the last 50 years. It has become the extremely competitive international industry it is today due to this. The Global Airline Industry has a team of over 2000 airlines that are home to more than 23,000 aircrafts. They transported over 2 billion passengers worldwide to an amazing 3700 airports in 2006, all crucial numbers to help prove why they are one of the biggest most necessary industries today. The Global Industry has connected the world, and been the missing link to a global economy that is taking over. Over the past 30 years numbers have shown an average of a 5% increase of World Air Travel, years obviously varying due to the economies influence all over the world but none the less a steady improvement of demand. The records show that the annual growth of the world air travel has been approximately double the annual growth of GDP. (Global Airline Industry Program: Airline Industry Overview, 2008) Global Airline Industry Statistics (IATA Fact Sheet: Industry Statistics, 2009): 2003 REVENUES $ BILLIONS % CHANGE PASSENGER INPUT CARGO INPUT 322 5.2 249 40 2004 379 17.7 294 47 2005 413 9.1 323 48 2006 465 12.5 365 53 2007 508 9.2 398 59 2008 535 5.4 421 61 2009 455 -15 355 44 2010 476 4.6 371 47

TRAFFIC VOLUMES PASSENGERS IN MILLION % PASSENGER GROWTH 1691 2.3 1888 14.9 2022 7 2124 5.9 2281 5.9 2271 0.8 2179 -4 2250 3.2

Market Demand Analysis:

In the last seven years the Airline Industry has seen steady increases in revenues and passenger traffic volumes since the tragic incident of September 11 , 2001. The major downfall in total revenue of 2001 which was measured at -6.4% was not only due to the terrorist scares but a struggling economy. In 2009 the economy has been the victim to an overwhelming recession that has left the Industry with some awful numbers, dropping 15% revenues in early stages, and over 4% in Passenger Traffic. This is very
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bad short-term news for most Airline companies, but West Jet is looking past it. The demand for air travel right now has hit a serious rut, but West Jet has the advantage of the lowest cost structure of Canadian Airlines as well as plans in January to implement a Loyalty Program with multiple airlines to secure demand for next year. (Deveau, S. 2009. WestJet pushes back loyalty program launch)

Market Future Demand:

WestJets overall year-to-year costs are still down 7.9%, but demand for Airlines on the global scale looks favourable. Historically we see the demand for air travel growing at close to double the rate of the GDP, and dont have any reason to doubt that as our GDP rises in the outturn of this recession. In previous experience of the recession of 2001, we saw double-digit numbers in % growth of Passenger Traffic and Revenues in the 2-3 following years. Market analysts believe in these numbers expecting a 3.2% growth in passenger traffic for 2010, as well as a 4.6% rise in Revenues, which is a promising start for a turn around (Deveau, S. 2009, Airline Recovery on Horizon). Global Market studies predict a 20-year forecast that shows an annual increase in passenger traffic growth by 4.7% worldwide (Global Market Forecast 2009-2028, 2009). WestJet plans to grasp some of this increasing demand with already confirmed orders of 53 new aircrafts planed to be up and flying by 2016(WestJet named Canadian airline of the year, 2009). With WestJet ASM (available seat miles) increasing over the last few years showing theyre growth along with the demand in the industry, they have recently announced a 1.5% increase in load factor reaching a 2009 high of 77.3% in October. WestJet has not only made executive decisions to capitalize on existing demand in the industry but also targeted its sights on new high-class world travelers in Canada, offering flights to Bermuda starting in 2010. This is just one of many parts to the new agenda of WestJet, which shines some light on the struggling industry and is looking positive.(WestJet announces service to Bermuda, 2009) WestJet Traffic Statistics (#s in thousands) (WestJet Aiming High: 2008 Annual Report): 2009 Available Seat Miles (ASM) Load Factor % Full 13,130,000,000 77.30% 2008 17,138,883,465 80.10% 2007 14,544,737,340 80.70%

WESTJET COMPETITIVE ANALYSIS

The caring and dedicated nature of our people is what makes WestJet a different kind of airline, says WestJets President and CEO Sean Durfy. The young thirteen-year old airline has been quickly making its way to the top of the Canadian airline industry; and has hopes of becoming one of the top airlines internationally in the near future. WestJet states that they ar e continuously looking for ways to enhance your travel in addition to providing safe, friendly and affordable air travel (Welcome Onboard, WestJet, 2009). Major competitors of Westjet include:

Air Canada Air Canada has been in the business under the name Air Canada for 45 years; however the company itself began 72 years ago under the name Trans Canada Airlines. The name then changed in 1964 when the airline had grown to become Canadas national airline. Head office for Air Canada is located in Montreal Quebec, accompanied by hubs in Vancouver, Calgary, and Toronto (facts & figures, Star Alliance, 2009). Air Canadas mission is Connecting Canada to the world and their vision is Building loyalty through passion and innovation (Mission, vision, & values, Air Canada, 2009). Air Canada provides various products and services to ensure passengers with an enjoyable flying experience. Firstly there are the 24 700 employees that make the 1370 flights daily to 171 scheduled destinations possible (facts & figures, Star Alliance, 2009). Air Canada provides a number of mobile services for customers including mobile.aircanada.com, mobile check-in, electronic boarding pass, and several more. Kiosk check-in, Maple Leaf Lounges, duty free boutique, and various styles of cabin comfort are a few further services provided by Air Canada to influence people to fly with them. Each seat on Air Canada flights is now equipped with touch screen TVs outfitted with on -demand video to contribute to a pleasurable flying experience (Products & services, Air Canada, 2009). Air Canada provides some low cost alternatives within the airline such as Air Canada Jazz; but is set back by their downfall of additional surcharges, high cancellation and rescheduling fees, as well as regularly higher ticket prices compared to its competitors (About Air Canada, Air Canada, 2009)

American Airlines

American Airlines, which was founded in 1934 and based out of Fort Worth Texas, is an American company that has had a strong 75 years in the business. As one of the world largest airlines it employs 84 100 employees and offers over 3400 daily flights to over 250 cities around the world (American Airlines, inc Overview, American Airlines, 2009). American Airlines offers a number of in-flight amenities and entertainment options to meet the needs of each passenger. Cabin comfort comes in a number of options from a comfortable coach class to a first class that provides privacy dividers, and swivel seats with the ability to fully flatten into a 6-foot bed (Cabin Comfort, American Airlines, 2009). American Airlines also has the Admirals Club that gives members access to over 40 Admiral Club locations world wide in addition to 30 other international lounges. American Airlines credit cards, gift cards and buy & share gift miles are available to customers to further the options and benefits available with American Airlines (Products and Gifts, American Airlines, 2009). The AAdvantage is a travel awards program offered by American Airlines that began over 25 years ago; and is now the worlds largest program of its kind. American Airlines is one of three airlines involved in this program (AAdvantage program details, American Airlines, 2009). When it comes to making global travel easier and more enjoyable American Airlines has made alliance partners around the world with various transportation companies to ensure a seamle ss travel experience (Alliances & Affiliates, American Airlines, 2009). American Airlines has a mission to provide safe, dependable and friendly air transportation to our customers as well as being dedicated to making every flight you take with us something special (Customer Commitment, American Airlines, 2009).

BROADER ENVIROMENT Technological Forces:

In an age in which technology is constantly being improved upon and thrust into the limelight, the air industry is about to be hit with a massive change. The Airbus A380 is the worlds largest commercial airliner to date. It is a double-decker style aircraft which provides more passenger space and capacity then ever before. With the new line of Airbus jumbo planes coming into the fray there will be a new form of air travel, larger and more luxurious. This will greatly change the industry and its competitors. While Westjet will most likely not invest in this product as it is very expensive and unnecessary for their current scale of operation, their competitors will and are. Every major European airline has put in an order for an A380 and there is already 20 currently in use (A380 Family, 2009). If Westjet plans to continue their expansion internationally and be one of the five most successful airlines by 2016, they will have heavy competition with the presence of this new product.

Natural Forces:
Though Global warming and a rise in natural disasters have occurred as of late, there is no direct correlation between those factors and flying. Even with their rise, Westjet is still steadily growing every year, with a 19.9% rise in revenue between 2007 and 2008 (Westjet 2008 Annual Report).

Economic Forces:
With the current global economic situation, almost every business is cutting back costs in some way. When reductions are needed, more and more business trips are being halted. This is also true for the average consumers of airlines. With a large quantity of people losing money on the stock market and less money being earned by the average individual, these same individuals are forced to cut their costs. This backtrack of spending includes vacations and travel in general. With air travel being one of the most expensive forms of transportation available, the industry is taking a hit. From 2008 to 2009 alone, the Transportation and Warehousing industry in Canada fell 29% from $7.3 billion to $5.2 billion (BDC, 2009). Subsequently, the lack of demand has also caused ticket prices to rise in the United States, with fuel, booking fees and taxes rising 7.2% in the first quarter of 2009 (Caroline Brothers, March 18, 2009) and the global price of jet fuel rising 16.6% from a year ago, as of November 20 (IATA Fuel Monitor, 2009).
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Government and Political Regulations:

WestJet Airlines has to adhere to many different government regulations being an international airline corporation. WestJet must to plan its aerial routes accordingly in order to comply with the regulations prescribed by different government agencies. These sets of rules such as the Canadian Aviation Regulations depict the location and polices regarding prohibited and restricted airspace. (General Operating and Flight Rules, 2009) WestJet must plan its flight paths around these prohibited and restricted areas not only for the necessity of conforming to the law, but also for the safety of the passengers and employees. The fact of navigating around certain areas may result in greater distances to cover, which can lead to higher fuel consumption, thus higher costs for the corporation. Another example of a government policy which affects WestJet is the Temporary Flight Restriction which is defined in the Code of Federal Regulations as: A TFR defines an area restricted to air travel due to a hazardous condition, a special event, or a general warning for the entire FAA airspace. ( 2009). TFR can unexpectedly change scheduled flight paths by several miles. The extra miles of flight can result in an increase in fuel consumption which can affect the costs of the corporation.

Social/Cultural Forces:

The going green movement has become a public phenomenon once the issue of global warming has become public knowledge. The new found initiative of consumers to choose more environmentally friendly products has affect several industries, aviation being one the biggest affected. Jet fuel emissions produce much more carbon dioxide then regular gasoli ne, for example: a New York -to-Denver flight, a commercial jet would generate 840 to 1,660 pounds of carbon dioxide per passenger. That's about what an SUV generates in a month. (Stoller, 2006). In order to comply with consumers increasingly greener demands and in an effort to save on a growing fuel consumption cost, WestJet replaced its fleet of 737200 Boeing aircrafts to a greener 737 Next Generation aircrafts. (Environment, westjet.com, 2009) The carbon dioxide emissions of the 737 Next Generation aircrafts are 30% lower then the previous fleet. (Environment westjet.com, 2009) WestJet also added Blended Winglet Technology to reduce fuel burn of their engines by 2.7% per flight. (Environment, westjet.com, 2009). They also added tech-insertion technology in order to reduce oxides of nitrogen by 20%. (Environment, westjet.com, 2009).

Demographic Forces:

The North American demographic is constantly changing. The baby-boomers are getting older, and diversity and multiculturalism is increasing. This change in demographic is going to have an effect on many industries, including aviation. As the baby-boomer generation ages and eventually retires, the demand for flights will decrease, due to health complications that may arise or less disposable income to spend on travel due to retirement. (Coughlin and Tompkins, 2009, p.4) In order to avoid a loss of customers, WestJet will have to find ways to either promote their product to the aging baby-boomer generation. They also have the option of finding new customers in order to assure the continuation of their business. According to WestJets company vision, finding new customers is exactly what they plan to do: By 2016, WestJet will be one of the five most successful international airlines in the world providing our guests with a friendly and caring experience that will change air travel forever. (2009)

WestJet Swot Analysis Conclusion

Strengths:
WestJet has recently been voted the Canadian Airline of the Year, and our analysis shows much strength inside the company to justify this award. WestJets key to success trickles down to the basics, having the lowest airfare costs in Canada gives them an automatic advantage. They not only have been home to a rapidly growing fleet of planes, but now offer a 30% percent more fuel efficient line of Boeing 747 jets. They have also integrated their strengths into the online community providing flyers with a constantly updated company website, as well as an extremely user-friendly vacation planning site called WestJet Vacations. WestJet has aimed to please by maximizing its strengths from funny flight attendants to unbeatable customer service.

Weaknesses:
When looking inside WestJet as a company, their comparatively better business plan along with friendly, reliable service does not show a lot of weakness. They do however lack the aspect of many Trans-Continental flights, and with the idea of global markets and economies rising fast this has been seen as a weakness. Travelers may not be provided with the international destination they are looking for and could be turned to another airline, another problem arises with customers looking elsewhere. When higher-class travelers are looking to fly with some added comfort and service, WestJet does not provide any sort of first class seating which can be a factor of lost business. Travelers have also brought up the fact of accommodating to larger passengers where the seats arent big enough, and some of the hungrier passengers do not agree with the complimentary snacks only being served on flights two or more hours in length.

Opportunities:
WestJet has grown at an alarming rate since its birth in 1996. They have covered Canada in destination spots, and now they have their eye on the international scene. WestJet already offers many destinations outside of North America but has a 2010 agenda to expand even further to places like Bermuda and Ireland. With this expansion they have capitalized on, they have preordered a fleet of 53 new aircrafts to support increased demand that are planned to be up and flying by 2016. WestJet has made a bold statement along with its international break through, announcing they plan to be in the top 5 international airline companies by 2016. Opportunities arise everyday in the online network world, and

WestJet plans to take advantage of them already connecting with Facebook and Twitter, and have plans to implement a Loyalty Program that helps secure credit card numbers with frequent flyers.

Threats:
The airline industry is just one part of a bigger transportation industry, all providing ways of getting front point A to point B. WestJets potential customers all face the alternative option of different transportation such as bus lines, train systems, ferry services, and driving their own vehicle. Customers also have the choice of flying with a competing airline, which is a major threat because some people prefer airlines such as Porter or American Airlines. This only becomes a bigger threat for WestJet as they move more into the international system, having to compete with larger more experience airlines all over the world. The broader environment provides huge threats towards WestJet due to the small margin of revenue to operation cost. The rising cost of fuel proposes many problems, as WestJet must raise prices to stay profitable against fuel, as well as dealing with a fluctuating economy that reduces demand. As we have experienced in the past the threat of terrorists is still out there, and holds the potential to cause many problems toward WestJet and their service of flying.

Conclusion:
Our team of analysts have studied inside the company of WestJet, the marketplace it performs in, and the broader environment that effects its success. In all cases we have found the positives highly out weighing the negatives in a business that seems impressive. They have shown great accomplishments in maximizing their strengths, and using that as a chance to grow at a pace competitors cannot keep up with. They do currently posses some weaknesses, but have recognized these weaknesses and developed an effective 2010 agenda to expand internationally, and minimize these problems. Turning their weaknesses into opportunities, and capitalizing on that opportunity is why WestJet is so successful. Planning to have an ambitious next few years, WestJet will be expanding in size and territory covered as the opportunity arises. The possible threats toward WestJet do not impose an incredible amount of power at the moment, with the economy on the up rise of the recession, and WestJet looking comparatively better to respond along with the economy. We as a team have found the contents of this report to show a very favourable company emerging in a suffering yet recovering industry. We believe it would be a strategic and advantageous company to invest your money in.

BIBLIOGRAPHY

- Air Canada (2009). Home. Retrieved from http://www.aircanada.com/en/home.html - Airbus. Aircraft Families/A380 Family. Retrieved from: http://www.airbus.com/en/aircraftfamilies/a380/home/ - American Airlines (2009). Home. Retrieved from http://www.aa.com/homePage.do - Brothers, Caroline (2009, March 18). Airfares Rise Even As Fuel Prices Fall. Times. Retrieved from: http://query.nytimes.com/gst/fullpage.html?res=9404E3D6173FF93BA25750C0A96F9C8B63 - Coughling, Joseph., & Tompkins, Curtis. (2009, April). Demographics, Destiny, and Anticipating - Federal Aviation Administration (2009). Code of Federal Regulations. Retrieved from http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgFAR.nsf/MainFrame - Hotel News Resource. (2009, November 10). Recession Takes Toll On Canadian Industries. Retrieved From: http://www.hotelnewsresource.com/article42169Recession_Takes_Toll_on_Profits_in_Canadian_Industries.html - International Air Transport Association. Jet Fuel Price Monitor. Retrieved from: http://www.iata.org/whatwedo/economics/fuel_monitor/index.htm - Star Alliance (2009). Facts & Figures. Retrieved from http://www.staralliance.com/en/about/airlines/aircanada/ - Stoller, Gary. (2006, December 19). Concern grows over pollution from jets. USA Today. Retrieved from http://www.usatoday.com/money/biztravel/2006-12-18-jet-pollution-usat_x.htm - The Future of the Transportation System. Sage Publications, Retrieved from http://web.mit.edu/coughlin/Public/Publications/Coughlin,%20Tompkins%20PWMP%20April%202009.pdf - Transport Canada (2009) . Part VI - General Operating and Flight Rules. Retrieved from http://www.tc.gc.ca/civilaviation/regserv/affairs/cars/part6/subpart1.htm - Waterstone Human Capital website. Canadas 10 Archive: The 2008 Canadian Corporate Culture Study . Retrieved 4 November 2009 from http://www.waterstonehc.com/cmac/archives - WestJet.com website. Investor Fact Sheet. Retrieved 30 October 2009 from http://www.westjet.com/pdf/investorMedia/investorFactSheet.pdf - WestJet.com website. Board of Directors. Retrieved 30 October 2009 from http://www.westjet.com/guest/en/aboutUs/corporateProfile/boardOfDirectors.shtml The New York

- WestJet.com website. Annual Financial Reports. Retrieved 30 October 2009 from http://www.westjet.com/guest/en/aboutUs/mediaInvestors/annualReports.shtml - WestJet (2009). Environment. Retrieved from http://www.westjet.com/guest/en/aboutUs/environment/fuelEfficientFleet.shtml

Appendix Market Competition

BSAD 101 Introduction to Business COMPANY PROFILE

Company Name: Company Information: Industry (s)

Air Canada

Airlines

Number of Employees

24 700 Services provided- 1370 flights daily to 171 scheduled destinations. - A number of mobile services (includes mobile.aircanada.com, mobile check-in, electronic boarding pass, Air Canada I phone app, mobile flight pass and notification services) - Kiosk check-in - Maple leaf lounges (located in all the major air ports across Canada as well as key international locations. Provides an escape from the commotion) - Duty free boutique (provides duty free items to buy on board as well as purchase online) - Concierge services (provided to anyone flying executive first on an international flight as well was any elite members) - Cabin comfort (Seats recline into a fully flat bed to enable a good nights sleep located in elite area, 20-21 executive seating with touch screen tv and 120-124 degree seat recline, finally 18 economy seating equip with touch screen tvs)

Product(s) Manufactured or Service(s) Provided

Number of Years in Business

72 years total (Was trans Canada airlines from 1937- 1964. Changed its name to Air Canada in 1964.) 45 years as Air Canada

Location (s)

Head office is located in Montreal Quebec, accompanied by a number of offices throughout the rest of Canada and the US. (hubs in Vancouver, Calgary and Toronto)

Vision/ Mission/ Overview

Mission- Connecting Canada to the world. Vision- Building loyalty through passion and innovation.

Management Information:

Name of CEO CEOs History

Calin Rovinescu

Preceding 2000 Calin Rovinescu was the managing partner of Sikeman Elliott law firm in Montreal as well as a member of the firms partnership board and executive committee. In 2000 Rovinescu became Air Canadas Executive Vice President of corporate development and strategy and held this position until 2004. Calin Rovinescu rejoined Air Canada as their President and chief executive officer in April of 2009.

Board of Directors (List Names and Affiliations) Bernard Attali (Paris france)Honorary Chairman of Air France Group and Senior Advisor for TPG Capital. Michael M. Green (Radnor, Pennsylvania)- General Partner of Tenex Capital Management.

Jean Marc Huot (Montreal, Quebec)A partner with the Canadian law firm Stikeman Elliott LLP and co-chair of the firm's national Securities Law Group.

Pierre Marc Johnson (Montreal, Quebec)- Counsel to the offices of the Canadian law firm Heenan Blaikie LLP and advises, mediates and negotiates for or with various governments, United Nations related organizations and other international institutions.

Joseph B. Leonard (Minneapolis, Minnesota)- corporate director. He serves on the boards of Mueller Water Products, Inc. and Walter Industries, Inc. Arthur T. Porter (Montreal, Quebec)Director General and Chief Executive Officer of the McGill University Health Centre

David I. Richardson (Grafton, Ontario)- corporate director. Mr. Richardson is a director and the Chair of the Audit, Finance and Risk Committee of ACE Aviation Holdings Inc. Calin Rovinescu (Montreal, Quebec)

Vagn Srensen (Holte, Denmark)Senior Industrial Advisor with EQT Partners, a private equity fund.

Financial Information: 2004 (000s) Sales Expenses Net Income (Loss) Total Assets Total Liabilities Not found 2005 (000s) 9509 9318 (74) 10 262 2006 (000s) 10 164 10 050 185 11 749 2007 (000s) 10 646 10 213 429 11 922 2008 (000s) 11 082 11 121 (1025) 11 364

BSAD 101 Introduction to Business COMPANY PROFILE

Company Name:

American Airlines

Company Information: Industry (s) Airlines

Number of Employees

84 100 - Over 3400 flights daily to over 250 cities around the world - In flight entertainment - In flight amenities (provides blankets [duvets on business and first class], pillows, towels, flight magazine, ect) - Cabin comfort (AA provides comfortable coach class with each seat equip with a power port, business class equipped with large comfortable seats and additional leg room, and first class provides privacy dividers, and swivel seats with the ability to fully flatten into a 6 foot bed. - Admirals club (Allows members to over 40 admiral club locations worldwide as well as 30 international lounges) - American airlines credit card (Allows differed payment times, no annual fees, and can purchase any goods and services provided by AA) - American airlines gift card - Buy and share gift miles (buy gift miles and share them with any other gift mile member) - AAdvantage (Americas travel awards program)

Product(s) Manufactured or Service(s) Provided

Number of Years in Business Location (s)

75 (founded in 1934)

Head office is located in Fort Worth Texas accompanied by other locations in numerous cities around the world.

Vision/ Mission/ Overview

Are in business to provide safe, dependable and friendly air transportation to our customers, along with numerous related services. We are dedicated to making every flight you take

with us something special.

Management Information:

Name of CEO CEOs History

Gerard J. Arpey After receiving his MBA in 1982 Gerard J. Arpey joined American airlines as a financial analyst. In 1989 Arpey became corporate officer as well as being elected vice president of financial planning and analysis. Aprey then went on to become Vice President of Operations, followed by COO, and finally President, Chairman and CEO of American Airlines in May 2004.

Board of Directors (List Names and Affiliations)

Gerard J. ArpeyChairman, President and CEO With AMR Corporation/American Airlines, Inc.(air transportation) - From Fort Worth, Texas John W. BachmannSenior Partner With Edward Jones investing (financial services) - From St. Louis, Missouri David L. BorenPresident With The University of Oklahoma (educational institution) - From Norman, Oklahoma Armando M. Codina Chairman With Flagler Development Group, Inc. (commercial real estate and railroad businesses) - From Coral Gables, Florida Rajat K. Gupta- Senior Partner With Emeritus McKinsey & -

Company, Inc. (management consulting) - From Stamford, Connecticut Alberto Ibargen- President & Chief Executive Officer With John S. & James L. Knight Foundation (private journalism philanthropic foundation) - From Miami, Florida Ann M. Korologos- Chairman With RAND Corporation Board of Trustees (international public policy research) - From Santa Monica, California Michael A. MilesSpecial Limited Partner With Forstmann Little & Co. (investment banking) - From New York, New York Philip J. PurcellPresident With Continental Investors, LLC (private investment services) - From Chicago, Illinois Ray M. Robinson- - Chairman - With Citizens Trust Bank (banking) - From Atlanta, Georgia Dr. Judith Rodin- President With The Rockefeller Foundation (private philanthropic institution) - From New York, New York Matthew K. Rose- Chairman, President and Chief Executive Officer - With Burlington Northern Santa Fe Corporation (rail transportation) - From Fort Worth, Texas Roger T. Staubach- Financial Information: Executive Chairman With Americas Jones, Lang, LaSalle Inc. (real estate services) From Addison, Texas -

2004 (000s) Sales Expenses Net Income (Loss) Total Assets Total Liabilities 18 645 18 789 (751) 28 773 Not found

2005 (000s) 20 712 20 805 (875) 29 495

2006 (000s) 22 563 21 503 231 29 145

2007 (000s) 22 935 21 970 504 28 571

2008 (000s) 23 766 25 655 (2071) 25 175