Running Head: MARKETING PLAN: AMERICNA AIRLINES EXECUTIVE JET

Marketing Plan: American Airlines Executive Jets

Jeremy Paul Stephens
Embry-Riddle Aeronautical University

This paper is for educational purposes only, and is for a fictional entity.

MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

Executive Summary

This paper is for educational purposes only, and is for a fictional entity.

MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

Situation Analysis
American Airlines was initially founded as American Airways Inc. by the consolidation
of more than 80 small airlines in 1930, and subsequently were renamed American Airlines Inc.
in 1934 (History of AMR Corporation and American Airlines, 2011). American Airlines was
able to maintain its status as an industry leading airline, throughout its 70 plus year history.
However the events of September 11, 2001, antiquated pre-regulation labor agreements, and the
global recession of the late 2000s proved too much, and American Airlines eventually declared
bankruptcy in November of 2011, the last of all legacy airlines to do so. According to Thomas
W. Horton, then CEO of AMR Corporation, the parent company for American Airlines, filing
bankruptcy allowed the airline to restructure vast amounts of debt, and lower its labor costs. This
move would restore the companys profitability, operating flexibility, and financial strength,
(De La Merced, 2011). In December 2013, as AMR Corporation exited bankruptcy, AMR and
US Airways Group officially announced a $17 billion merger. The new American Airlines
Group now has over 100,000 employees, nearly 6,700 daily flights to over 330 destinations in
over 50 countries, and is the largest airline in the world (Karp, 2013) (Stephens, 2014).
American Airlines Groups second quarter 2014 non-GAAP net profit excluding net special
charges was $1.5 billion, with a net profit after special charges of $864 million (American
Airlines Group, 2014). American Airlines Group expects net profits for the year to exceed $6
billion, or $3.2 billion after special charges.
American Airlines is dedicated to serving current and future customers by continuing to
build on its overall network of 330 destinations. American see growth opportunities in
destinations in South America, and especially the Asia-Pacific region. American has bolstered
its service in Asia by adding flights to and from Shanghai and Hong Kong via Dallas-Fort

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MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

Worth, Chicago, and Los Angeles. American continues to see this as a growth opportunity and
has requested adding Beijing to its list of destinations from Dallas-Fort Worth (Ahles, 2014).
American has also requested that the U.S. government award a slot at Tokyo-Haneda from Delta
as it could make better use of year round service from Los Angeles than Deltas seasonal service
from Seattle-Tacoma (Schlangenstein, 2014).
In assessing various opportunities for network growth enhancement, both domestically
and internationally, American has recognized the opportunity to bolster growth, and provide a
new type of service to meet our most travel dependent customers needs. American Airlines
Executive Jets will provide executive service to clients aboard private jets that meet the
customers needs, and either feed into the existing network, or offer direct charter service
between points chosen by the customer. Adding private executive aircraft to the total American
Airlines fleet effectively adds 5,000 destinations to the network via the use of general aviation
(GA) or noncommercial airports (Charter & other nonscheduled air transportation services quarterly update 8/25/2014, 2014).
American is dedicated to offering customers a broad range of options to meet their travel
needs, while still being an industry leader in environmental programs as well as giving back to
the community. American Airlines Executive Jets will enhance American Airlines Groups
community outreach including honor flights, Skyball, mAAgic flight, and Snowball Express.
American Airlines Executive Jets will also include a comprehensive carbon offset program that
will help to address concerns of the new subsidiarys environmental impact and establish
measures to continually reduce or exponentially offset its carbon footprint (NetJets Announces
Comprehensive Climate Initiative, 2005).

This paper is for educational purposes only, and is for a fictional entity.

MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

Potential customers of American Airlines Executive Jets are hard-working, and desire to
do everything possible to capitalize on the one commodity that can never be banked or stored:
time. While the target customers may have money to spend, they still want value, flexibility, and
to see the personal benefit for their purchase. These customers will include mid to upper level
professionals, executives, high net-worth individuals, even sports teams, as well as the US
military, and government agencies.
The main competitors of American Airlines Executive Jets are Delta Private Jets, and
NetJets. Delta Private Jets is a wholly owned subsidiary of Delta Airlines, and provides travel
services for customers who are seeking charter services and do not mind paying a premium for
the service. Delta targets these customers through primarily print ads in affluent publications, as
well as at events and locations that the target audience is likely to attend or visit. Delta Private
Jets also offer jet management and technical operations for jet owners. The primary strength of
Delta Private Jets is the financial backing and reputation of the parent company Delta Airlines. It
is also worth noting that Delta Private Jets consistently achieves the highest safety rating in the
industry. Their primary weakness is that they have a small fleet size, and thus a small market
share. Delta Private Jets biggest op[opportunities lie in expanding its fleet in order to expand
market share especially in growing regions such as Latin America and Asia Pacific. Deltas
threats are a result of their size, they are smaller than their direct competition in the market, and
the large cost and volatility of fuel wreak havoc in the charter jet market (Brown, 2011; Delta
Private Jets, 2014).
NetJets is a jet card, charter jet, and fractional ownership executive jet company based
out of Columbus, Ohio, and is owned by Berkshire Hathaway. NetJets is the largest executive jet
company in the industry, with over 800 aircraft spread across more than 15 airframe types.

This paper is for educational purposes only, and is for a fictional entity.

MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

NetJets serves the entire world with over 300,000 flights a year through their three divisions
NetJets US, NetJets Europe, and NetJets China. Like Delta Private Jets, NetJets provides travel
services for customers who are seeking charter services and do not mind paying a premium;
however they offer it through different means. The customer can buy time through a jet card
which is used on any jet, or they may lease a specific amount of time on a specific jet, or a
customer can own a specific amount of time on a specific jet each year through the fractional
ownership of the jet. NetJets biggest strength comes from the fact that they are the company that
invented fractional ownership. They have been doing it the longest and control approximately 60
percent of the market. They are also owned by Berkshire Hathaway and have the financial
backing and security that comes along with their image and ability to expend large amounts of
capital. Their main weakness is that they are the most expensive company in the industry and
have very high operating costs, this is partially due to their extensive fleet diversity which drives
up maintenance and operating costs. Their opportunities lie in their established relationships with
vendors and suppliers, as well as airports, as they have been around for a while. They also have
the opportunity to easily compete in a new market as the capital is readily available to
immediately invest. NetJets main threats are similar to that off any air service company, the
volatility in the fuel market, as well as business slowdowns during economic downturns (NetJets,
2014).
The external market for charter jet and jet card service is favorable and growing. Market
analysts predict that the market will grow at a compounded rate of over 4 percent each year
between now and the end of 2018, the latest year for which market predictions are available.
American Airlines Executive Jets plans to not only tap into that market growth, but also to take
advantage of current customers who fall within the target profile. While the price of fuel will

This paper is for educational purposes only, and is for a fictional entity.

MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

most likely continue to rise, this will be offset by the brand new and fuel efficient fleet possessed
by American Airlines Executive Jets (Charter, 2014).
American Airlines Executive Jets strength comes from two main sources. The first is the
solid economic standing of the parent company American Airlines Group, with the current
profits realized from the bankruptcy emergence, as well as the recent merger, American Airlines
Executive Jets is poised to enter the market with a small debt load and reasonable operating
costs. Any startup losses will be able to be easily offset or absorbed by the parent company for
the foreseeable future until a market foothold can be established. The secondary strength lies in
the strength of the parent companys already extensive network. American Airlines Executive
Jets will be able to feed into and from this extensive network of destinations to immediately offer
customers a broad array of destinations worldwide. While American Airlines currently operates
an extensive regional network through its three regional carriers, it has never operated a fulltime
charter jet service. This fact is its most glaring weakness. American Airlines Executive Jets
opportunities come from the ability to tap into the extensive network and customer base of its
parent company and immediately establish a loyal customer base. Threats obviously come from
the two main competitors as well as the high cost of fuel in the industry.
Objectives
The objectives of the marketing plan are to reach 50 percent brand awareness in the target
market before the first year of operation is complete, and 75 percent within two years. The
market share plan is aggressive, as it is planned to obtain 5 percent of the market each of the first
three years of operation, in an end goal to control 15 percent of the market after three years.
Differentiation and Positioning

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MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

American Airlines Executive Jets will position itself within the same market as Delta
Private Jets and NetJets, affluent, discerning customers who are seeking private charter services
and a higher degree of flexibility and time management than is offered by our traditional
commercial services. American Airlines Executive Jets will focus solely on providing customers
with excellent, tailored service through the use of jet cards and direct charter services, and has no
plans to offer fractional ownership, or technical operations services to current jet owners.
American Airlines Executive Jets will also offer the most extensive route and connection
availability of any charter company in operation today.
Marketing Strategy
American Airlines Executive Jets offers private charter jet service through prepaid jet
cards or for hire charter services. This service will be offered on its fleet of 80 Embraer
Executive Jets, which will increase over the next three years to a fleet of 250 jets.
Jet

Size

Number in Fleet

Phenom 100

Up to 8

20

Phenom 300

Up to 11

20

Legacy 450

7 to 9

10

Legacy 500

8 to 12

10

Legacy 600

Up to 14

10

Legacy 650

Up to 14 Passengers

Lineage 1000E

15-25 Passengers

This paper is for educational purposes only, and is for a fictional entity.

MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

This paper is for educational purposes only, and is for a fictional entity.

MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

References
Brown, D.P. (2011, June 28). An Inside Look at Delta Private Jets. Airline Reporter. Retrieved
from http://www.airlinereporter.com/2011/06/an-inside-look-at-delta-private-jets-worldsabove-first-class/
Prince, R.A. (2013, June 11). Eight Trends In Private Jet Travel. Forbes Magazine. Retrieved
form http://www.forbes.com/sites/russalanprince/2013/06/11/eight-trends-in-private-jettravel/
NetJets Unions Organise Picket. (2014). Airline Industry Information, Retrieved from
http://search.proquest.com.ezproxy.libproxy.db.erau.edu/docview/1563925893?accountid
=27203
Charter & other nonscheduled air transportation services - quarterly update 8/25/2014. (2014).
Austin: Hoover's Inc. Retrieved from
http://search.proquest.com.ezproxy.libproxy.db.erau.edu/docview/1556079010?accountid
=27203
Study by renowned conklin & de decker shows the air partner JetCard has the advantage. (2014,
April 23). PR Newswire. Retrieved from
http://search.proquest.com.ezproxy.libproxy.db.erau.edu/docview/1518278270?accountid
=27203
De La Merced, M.J. (2011, November 29). American Airlines Parent Files for Bankruptcy.
DealBook. Retrieved from http://dealbook.nytimes.com/2011/11/29/american-airlinesparent-files-for-bankruptcy/?_php=true&_type=blogs&_r=0

This paper is for educational purposes only, and is for a fictional entity.

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MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

History of AMR Corporation and American Airlines. (2011). American Airlines Website.
Retrieved from http://www.aa.com/i18n/amrcorp/corporateInformation/facts/history.jsp
Karp, G. (2013, December 09). American, US Airways Complete Merger United Airlines Loses
Title as Worlds Largest Airline. Chicago Tribune. Retrieved from
http://articles.chicagotribune.com/2013-12-09/business/chi-american-airlines-merger20131209_1_us-airways-ceo-ceo-doug-parker-united-airlines/2
Stephens, J.P. (2014, September 23). Activity 6-4 American Airlines. Embry-Riddle
Aeronautical University.
American Airlines Group (2014, July 24). American Airlines Group Reports Highest Quarterly
Profit In Company History. PRNewswire. Retrieved from
http://hub.aa.com/en/nr/pressrelease/american-airlines-group-reports-highest-quarterlyprofit-in-company-history
Schlangenstein, M. (2014, October 2). American Airlines Asks U.S. for Tokyo Flight Slot Held
by Delta. Bloomberg. Retrieved from http://www.bloomberg.com/news/2014-1003/american-airlines-asks-u-s-for-tokyo-flight-slot-held-by-delta.html
Ahles, A. (2014, September 25). American announces plan to fly from DFW to Beijing. StarTelegram. Retrieved from http://www.star-telegram.com/2014/09/25/6148907/americanannounces-plan-to-fly.html
NetJets Announces Comprehensive Climate Initiative. (2005). 3Degrees. Retrieved from
http://www.3degreesinc.com/news/netjets-announces-comprehensive-climate-initiativesupported-3degrees

This paper is for educational purposes only, and is for a fictional entity.

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MARKETING PLAN: AMERICAN AIRLINES EXECUTIVE JET

Delta Private Jets. (2014). Private Jet Experiences the Way They Were Meant to Be. Delta
Airlines. Retrieved from http://www.deltaprivatejets.com
NetJets. (2014). NetJets 50th Soaring Higher. NetJets IP. Retrieved from
http://www.netjets.com/Home/

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