Originally published in American Airlines' 2023 Sustainability Report
American is committed to conducting business in an ethical manner consistent with our values. We partner with our suppliers to achieve these standards, including working with them to keep customers and their employees safe, minimize their impact on the environment, create an inclusive workplace and respect human rights.
Setting expectations and evaluating risks
American sources products and services from thousands of suppliers, and we have robust supply chain oversight across our different business units. We do so directly and through third-party screening services, and we focus engagement efforts on suppliers deemed critical to our business. Since our suppliers, in turn, often rely on other companies, we work to understand the nature and risks related to the businesses they source from as well.
More recently, we have worked to consolidate these practices across our enterprise. Our approach is outlined in American’s Sustainable Supply Chain Policy, which we updated in July 2024. Our activities cover a broad range of suppliers, and examples include food safety inspections of caterers and audits of software-as-a-service providers to confirm security protocols.
American is developing a unified way to examine all third-party spending, which will improve visibility into our full supply chain and allow us to evaluate and improve upon our goals and policies as needed. Not surprisingly, in 2023, jet fuel was our largest operating expense after salaries, wages and benefits, and we engage our fuel suppliers on a wide range of environmental and social risks.
We outline our expectations for suppliers in American’s Standards of Business Conduct for Suppliers and train team members on its contents. We updated these standards in July 2023. Team members with sourcing and procurement responsibilities receive additional job-specific training relevant to their roles. We also provide training for suppliers, particularly those in airport, ground handling and deicing services, to help develop their capabilities in mitigating risks.
Although we strive to partner with suppliers who share our standards, issues inevitably arise that require remediation. Some minor issues can be corrected by alerting the supplier to the problem. For more serious issues, such as those potentially impacting safety or security, we require suppliers to submit a corrective action plan that we can monitor for implementation. If the supplier cannot identify a suitable solution, we work directly with the supplier to improve its performance. We will terminate a business relationship if our efforts prove unsuccessful.
Looking ahead, we intend to expand our responsible sourcing efforts and disclosures on our progress. In response to shareholder feedback, our initial focus will be on providing enhanced reporting on workplace health and safety.
Strengthening our supplier diversity efforts
As part of ensuring a strong and resilient supplier base, American works to source from the broadest available marketplace to purchase the goods and services we need to run our business. This includes seeking to do business with small and diverse suppliers, which are important to our supply chain and can drive innovation, quality improvement and cost reductions. In 2023, our spending with more than 200 certified diverse suppliers (Tiers 1 and 2) increased by 7.4%, while our spending with over 1,000 small-business suppliers rose by more than 10% over 2022.
Our Supplier Diversity team is engaged with various organizations working to facilitate sourcing from qualified, diverse-owned businesses. For example, leaders from American serve on the boards of directors, as well as on the certification committees, of the regional councils of the National Minority Supplier Development Council and the Women’s Business Enterprise National Council.
“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.”
— Dan Bartel Chief Procurement Officer
Respecting human rights
Although we believe that governments are primarily responsible for safeguarding human rights, we endeavor to conduct our business in a socially responsible and ethical manner consistent with human rights principles. Our approach to human rights is guided by international standards, and we respect and support the following:
- United Nations (U.N.) Guiding Principles on Business and Human Rights
- Organisation for Economic Co-operation and Development’s Guidelines for Multinational Enterprises
- Core Conventions of the International Labour Organization (ILO)
- ILO’s Declaration on Fundamental Principles and Rights at Work
- U.N. Universal Declaration of Human Rights
The updated American Airlines Human Rights Statement, which our Board of Directors approved in May 2023, applies to all team members and contractors as well as our suppliers and other business relationships. We continually evaluate our operations and value chain to identify, assess and address human rights risks and to engage key stakeholders. This evaluation is carried out as part of American’s overall assessment process of critical and significant suppliers for sustainability risks, as outlined in our Sustainable Supply Chain Policy.
Our Human Rights Statement complements our annually required team member training on the Standards of Business Conduct. We also provide a dedicated 24/7/365 EthicsPoint hotline for team members, suppliers and partners to report human rights concerns anonymously. American does not tolerate any retribution or retaliation against any individual who has, in good faith, sought advice or reported questionable behavior or a possible violation.
