American Airlines was developed from a conglomeration of about 82 small airlines through a series of corporate acquisitions and reorganizations: initially, the name American Airways was used as a common brand by a number of independent air 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), and Colonial Air Transport in the Northeast.
On January 25, 1930, American Airways was incorporated as a single company, with routes from Boston, New York and Chicago, to Dallas, and a route from Dallas to Los Angeles. The airline operated its routes with wood and fabric covered Fokker Trimotors and all metal Ford Trimotors. In 1934 American began flying Curtiss Condor biplanes fitted with sleeping berths.
In 1934, American Airways Company was acquired by E.L. Cord, who renamed the company "American Air Lines". Cord hired Texas businessman C.R. (Cyrus Rowlett) Smith to run the company. Early in its history, the company was headquartered at Chicago Midway International Airport in Chicago, Illinois.
Smith worked closely with Donald Douglas to develop the DC-3, which American Airlines started flying in 1936. With the DC-3, American began to brand itself using nautical terms, calling its aircraft "Flagships" and establishing the "Admirals Club," an honorary club for valued passengers.
The DC-3s had a four-star "admiral's pennant" which would fly outside the cockpit window while the aircraft was parked, one of the most well-known images of the airline at the time.
American was the first airline to cooperate with Fiorello LaGuardia's plans to build an airport in New York City, and partly as a result became the owner of the world's first airline lounge at the new LaGuardia Airport (LGA), which became known as the "Admirals Club." Membership was initially by invitation only, but a discrimination suit decades later changed the club into a paid membership club, creating the model for other airline lounges.
After World War II, American launched an international subsidiary, American Overseas Airlines to serve Europe; however, AOA was sold to rival Pan Am in 1950. AA launched another subsidiary around the same time, Líneas Aéreas Americanas de Mexico S.A., to operate flights to Mexico, and built several airports there.
American Airlines was an early adopter of jet aircraft, and introduced the first transcontinental jet service using Boeing 707s on January 25, 1959. With the introduction of its "Astrojets," as it dubbed the new jet fleet, American's focus shifted to nonstop coast-to-coast flights, although it maintained feeder connections to other 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) together with IBM, and built an upgraded terminal at Idlewild (now JFK) Airport in New York City which became the airline's largest base of operations.
American changed its routing to a hub-and-spoke system starting in 1981, opening its first hubs at DFW and Chicago O'Hare. American began flights to Europe and Japan from these hubs in the mid-1980s.
In the late 1980s, American opened three new hubs for north-south traffic. San Jose International Airport was added as a hub after American purchased Air California. American also built a new terminal and runway at Raleigh-Durham International Airport to take advantage of the rapidly-growing Research Triangle Park nearby, as well as compete with USAir's hub in Charlotte. Nashville was also chosen as a hub.
Lower fuel prices in the era and a favorable business climate at the time led to higher than average airline industry profits. The industry's expansion was not lost on the American Airline's existing employees who on February 17, 1997 struck for higher wages. President Bill Clinton invoked the Railway Labor Act citing economic impact to the United States a few minutes later quashing the strike. Pilots settled for substantially lower wage increases than their demands as a result.
Three new hubs were all abandoned in the 1990s: some San Jose facilities were sold to Reno Air, and likewise at Raleigh/Durham to Midway Airlines. Midway went out of business in 2001. American purchased Reno Air in February 1999 and fully integrated its operations on August 31, 1999, but did not resume hub operations in San Jose.
Miami also became a hub after American bought Central and South American routes from Eastern Air Lines in 1990 (inherited from Braniff International Airways but originated by Panagra). Through the 1990s, American expanded its route 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 all 44 countries it serves.
Mr. Crandall left the company in 1998 and was replaced by Donald J. Carty, who negotiated the purchase of Trans World Airlines and its hub in St. Louis in April 2001.
The merger of seniority lists remains a contentious issue, particularly for pilots - the groups were represented by different unions at their respective airlines.
In the final merger, 60 percent of former TWA pilots were moved to the bottom of the seniority list at AA. The most senior TWA captain, hired in 1963, was integrated at the same seniority level as an AA captain hired in 1985. However, the TWA pilots were given "super-seniority" and a specified ratio of positions as captain if they stayed in St. Louis. The result was that most former TWA pilots stayed in St. Louis and roughly maintained their same relative seniority; though, some left St. Louis and fly in the co-pilot seat next to AA pilots who may have been hired at a later date, but are more senior outside the protections afforded to that base.
For cabin crews, all former TWA flight attendants (approximately 4,200 employees) were furloughed by mid-2003 due to the AA flight attendants' union putting TWA flight attendants at the bottom of their seniority list.
In the wake of the TWA merger and the roughly concurrent September 11, 2001 attacks by al-Qaeda operatives working under the direction of Osama bin Laden (which claimed two of AA's aircraft along with passengers and crew), American began losing money. Mr. Carty negotiated new wage and benefit agreements with the airline's labor unions, but was forced to resign after union leaders discovered that Carty was planning to award handsome executive compensation packages at the same time. St. Louis' hub was also downsized afterwards.
In Mr. Carty's wake, American has undergone additional cost-cutting measures, including rolling back its "More Room Throughout Coach" program (which eliminated several seats on certain aircraft types), ending three-class service on many international flights, and standardizing its fleet at each hub (see below). However, the airline has rebounded and expanded its service into new markets, including Ireland, India and mainland China.
On July 20, 2005, for the first time in 17 quarters, American announced a quarterly profit; the airline earned $58 million in the second quarter of 2005. It had previously lobbied for the preservation of the Wright Amendment, which regulates commercial airline operations at Love Field in Dallas. On June 15, 2006, American reached an agreement with Southwest Airlines and the cities of Dallas and Fort Worth to seek repeal of the Wright Amendment on the conditions that Love Field remain a domestic airport and that its gate capacity be limited.
Some of the company's more famous slogans:
- "Something special in the air"
- "We're American Airlines, doing what we do best"
- "It's good to know you're on American Airlines."
- "Fly the American Way"
- "America's Leading (domestic) Airline"
