ness. Thus by the start of World War II, American Airlines had surpassed United as the biggest airline company in the US.
After the war, American expanded overseas, initially to Europe (American Airlines, 1996). In 1963, the company diversified into the hotel business, forming Americana Hotels. In 1964, American introduced the industry's first automated reservation system, called SABRE, which revolutionized that crucial part of the airline operation. In 1971, the company bought Trans Caribbean Airlines, giving it a strong foothold in that region's booming tourist trade. In 1977, American further expanded its hotel holdings by buying the Howard Corporation and, by 1978, operated 21 hotels and resorts in the US, Latin America, and South Korea.
In the early 1980s, American introduced the industry's first "frequent flyer" program (American Airlines, 1996). In 1982, the airline created AMR as its parent company, becoming its main subsidiary in the process. In the same year it also bought a small commuter airline which it developed and expanded into American Eagle. However, by the end of the decade, American's hotel business was failing, so it sold most such holdings in that sector.
The 1990s have been difficult times for American Airlines (American Airlines, 1996). It purchased new routes, including to Britain and Japan, as well as Midway Airlines' gates at LaGuardia and Washington's National airports, but such expansions have been disappointing in terms of profit, which in turn has caused retrenchment by the airline. Finally, and most significantly, labor problems emerged in 1993 with a costly strike by flight attendants, and in 1997 with a threatened strike by pilots.
The sheer size of American Airlines is a strength because it allows for flexibility in a changing market environment (American Airlines, 1996). For example, with its vast network of routes, the company can add, drop, or modify them to conform to new geo...