American Airlines’ Ethical & Sustainable Supply Chain

American Airlines published its sustainability report, which includes its Sustainable Supply Chain Policy, updated in May 2024.

This update consolidates practices enterprise-wide, covering diverse suppliers from food safety inspections to software audits. Additionally, a unified third-party spending review is being developed to improve supply chain visibility and policy evaluation.

The company has outlined its commitment to conducting its business ethically and consistently with its values, working with suppliers to achieve these standards – including keeping customers and employees safe, minimising environmental impact and creating inclusive workplaces that respect human rights.

Setting expectations and evaluating risks

American sources products and services from thousands of suppliers through its robust supply chain oversight across different business units, both directly and through third-party screening services. The company focuses engagement efforts on suppliers deemed critical to the business.

Since suppliers often rely on other companies, American works to understand the nature and risks related to the businesses they source from as well.

The airline is also working to consolidate these practices across its enterprise. Outlined in American’s Sustainable Supply Chain Policy, these practices cover a broad range of suppliers, including food safety inspections of caterers and audits of software-as-a-service providers to confirm security protocols.

American is also looking at ways to examine all third-party spending, aiming to improve visibility across the entire supply chain. This would be used to evaluate and improve upon its goals and policies as needed.

In 2023, jet fuel was the company’s largest operating expense after salaries, wages and benefits. The airline is also working with its fuel suppliers on a wide range of environmental and social risks.

Expectations for suppliers are set in American’s Standards of Business Conduct for Suppliers and team members are trained on its contents.

Team members with sourcing and procurement responsibilities receive additional job-specific training relevant to their roles. Training is also provided to suppliers, particularly those in airport, ground handling and deicing services, to develop their capabilities in mitigating risks.

To combat any issues along the supply chain, American’s remediation processes involve contacting suppliers to alert them to minor issues.

For more significant issues, such as those affecting safety or security, the airline requires suppliers to submit a corrective action plan that can be monitored for implementation.

If the supplier cannot identify a suitable solution, work is done directly with the supplier to improve its performance. However, the airline will terminate a business relationship if the efforts prove unsuccessful.

Looking ahead, American intends to expand its responsible sourcing efforts and disclosures on its progress, with an initial focus on providing enhanced reporting on workplace health and safety.

Strengthening supplier diversity efforts

To ensure a strong and resilient supplier base, American is working to source from the broadest marketplace available for purchasing goods and services to run the business.

This includes seeking to do business with smaller and diverse suppliers, which the airline says are important to its supply chain and can drive innovation, quality improvement and cost reductions.

In 2023, spending with more than 200 certified diverse suppliers (tiers 1 and 2) increased by 7.4%, while spending with over 1,000 small-business suppliers rose by more than 10% over 2022.

Through its Supplier Diversity team, the business engages with various organisations working to facilitate sourcing from qualified diverse-owned businesses.

Leaders from the airline serve on the boards of directors and on the certification committees of the regional councils of the National Minority Supplier Development Council and the Women’s Business Enterprise National Council.

Dan Bartel, Chief Procurement Officer, says: “In 2023, we released our Sustainable Supply Chain Policy and we’re building on that foundation to reduce risk and enhance the experience for our customers and team members.

"Doing so requires a willingness to examine our processes, tools and capabilities with an eye toward continuous improvement.”

Respecting human rights

While the airline believes that the government is primarily responsible for safeguarding human rights, it endeavours to conduct its business in a socially responsible and ethical manner consistent with human rights principles. Its approach to human rights is guided by international standards, through support of:

The updated American Airlines Human Rights Statement, which the Board of Directors approved in May 2023, applies to all team members, contractors, suppliers and other business relationships.

Through continually evaluating its operations and value chain to identify, assess and address human rights risks, American engages key stakeholders.

This evaluation is carried out as part of the company’s overall assessment process of critical and significant suppliers for sustainability risks, as outlined in the Sustainable Supply Chain Policy.

The Human Rights Statement complements the annually required team member training on the Standards of Business Conduct, as well as a dedicated 24/7/365 EthicsPoint hotline for team members, suppliers and partners to report human rights concerns anonymously.

American do not tolerate any retribution or retaliation against any individual who has, in good faith, sought advice or reported questionable behaviour or a possible violation.

Combating human trafficking

American Airlines continues to lead the fight against human trafficking, modern slavery and child exploitation with comprehensive training and strategic partnerships.

The airline requires mandatory human trafficking awareness training for frontline, customer-facing team members, including flight attendants, pilots and airport customer service representatives.

This training is obligatory for new hires and is included in recurrent training programmes. Additionally, modern slavery training developed by TRACE International is provided to team members with international purchasing responsibilities.

American Airlines regularly updates its reporting and security processes to incorporate the latest information and best practices. The airline's dedication to this cause has not gone unnoticed.

In January 2024, American Airlines received a Pro Bono Service Award from the US Government’s Legal Services Corporation. Nominated by Legal Aid of NorthWest Texas, the airline was commended for its role in establishing and scaling a collaboration that assists survivors of human trafficking in obtaining expungements and resolving other significant civil legal issues.

Collaboration with government agencies, industry partners and nongovernmental organisations is a cornerstone of American Airlines' human trafficking prevention programme.

An exemplary leader in this effort, the airline's Vice President at Phoenix Sky Harbor International Airport, serves on the Governor’s Council to Combat Human Trafficking in Arizona.

The Council focuses on human trafficking prevention and awareness initiatives within the state through strategic efforts.

Sophia Philis-Ortiz, American Airlines Vice President, Phoenix Sky Harbor International Airport, adds: “As the airline representative on the Governor’s Council to Combat Human Trafficking in Arizona, I know American can lend a unique perspective to the fight against trafficking.

"The council is a prime example of how collaboration between the public and private sectors can help us reach our collective goals.”

American Airlines’ partners in the fight against human trafficking include:

• PACT: This non-profit works to protect every child’s right to grow up free from sexual exploitation and trafficking, through education, legislative advocacy and partnerships. American is a signatory to the PACT Tourism Child-Protection Code of Conduct
• It’s a Penalty: This organisation combats human trafficking, exploitation and abuse through educational campaigns during major sporting events around the globe. Through its work, It’s a Penalty has helped protect more than 17,000 survivors of abuse, exploitation and trafficking and prevented the victimisation of many more
• The US Department of Homeland Security (DHS) Blue Campaign: This national public awareness effort educates the public, law enforcement and industry partners about human trafficking. In early 2024, American hosted human trafficking awareness sessions with either DHS or other partners
• New Friends New Life (NFNL): This Dallas-based organisation works to restore and empower formerly trafficked teenage girls and sexually exploited women and their children
• Texas Businesses Against Trafficking: This public-private awareness and prevention initiative is led by the Texas Secretary of State.

American's legal team oversees the company’s compliance with applicable domestic and international modern slavery and human trafficking laws.

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