Assignment 2: Mergers and Acquisitions

Despite Southwest’s long standing reputation as an employer who makes their employees and customers happy, there have been storms brewing in the company’s labor relations and customer relations sector. As was mentioned before, Southwest recently acquired AirTran Airways and revealed plans to take its already successful domestic business international with flights to Mexico and the Caribbean (Martin, 2014). This organizational restructuring is causing Southwest to have what Time Magazine’s Brad Tuttle calls an “identity crisis” for the airline whose new advertisements have removed the humor they are famous for and the messages of “bags fly free” from commercials. Bob Jordan, a Southwest executive, explained the change as a

The combined United Continental Holdings competes on the basis of having what it terms "the most comprehensive global route network", modern planes, and "an industry-leading loyalty program" (UnitedContinentalHoldings.com, 2012). The merger between two struggling airlines was announced in 2010, and the United brand is going to be the one that is most prominent going forward. There have recently been some minor implementation problems in unwinding the Continental name (Martin, 2012).

As I was thinking about the two companies that I wanted to do for my course project on, I began to research companies on the internet and I ran across the merger between United and Continental airlines. The reason that I choose to do the merger is because I knew that they were going to go through many changes within this merger. Both airline companies have a lot to offer to each other with this merger that they can compete with Delta airlines one of the largest airline in the world. This merger will bring about several changes within both companies. In this paper I will be providing the different changes between both companies with the merger including the culture, systems and unions. Since they

The Department of Justice and six state attorneys-general together filed a suit against the merger arguing that the merger would lead to an increase in airfare, in fees, and also limit choices also the merger agreement will cost workers jobs as American Airline was forced to relinquish hub status at several

At the time of the article, American had several competitive advantages. First, because they were a larger airline, their brand is preferred by consumers when all other factors (price, availability of flights, volume) remain equal. Also because of their size, many travelers have incentive to use them because of reward programs such as frequent flyer miles. American was also a major carrier hub at many cities around the country. Because of their hub status they were able to offer a larger volume of flights giving consumers more selection. Travel agents seemed to prefer American as well.

The joined aircraft is required to keep up all center points presently served by American Airlines and US Airways, bringing about more travel choices for clients. Both aircrafts expect that the territorial bearers they claim – AMR Corporation's American Eagle and US Airways' Piedmont and PSA – will keep on working as unmistakable substances, giving consistent support of the consolidated carrier. The organization will be headquartered in Dallas-Fort Worth and will keep up a noteworthy corporate and operational vicinity in Phoenix.

After employees saw how American Airline ranked sixth on competitive salaries compared with other companies in the industry they are thinking to leave the Allied Pilots Association and join the larger Air Line Pilots Association, because they felt their interest were not well represented by APA. Moreover when Delta agreed to better benefits and higher compensations than APA members, they decide it could be more beneficial to switch to a larger union.

When companies combine/merge the whole objective is to gain new opportunities, gain market share, grow the business, to become more innovative and to improve product offerings, utilizing/sharing the existing resources and data. From the case

American Airlines is the largest the airline company in the world measured by fleet size, revenue, number of destinations served, and scheduled passenger miles flown. Operating a total of 6.700 flights daily, while utilizing over 900 aircrafts, American flies to roughly 350 destinations in 50 countries. Employing over 100,000 employees worldwide, American cites much of its success from its elite and talented workforce. However, American has been forced to overcome significant obstacles since its merger with US Airways in 2013. Consequently, the merger has been slated as one of the most successful mergers in US History. Though proven arduous, their continued hyper-focus and commitment to all elements of its corporate strategy and vision ensured

* Rewards. The rewards program is a huge opportunity if the market it more towards the individuals that fly more than others do.

At the onset of the airline industry in the United States, major network airlines were the sole providers of air travel. This multifaceted industry was a difficult industry to break into as a consequence of “sophisticated customer segmentation, hub-and spoke models and costly information systems for reservations, fare wars and intense competition” (Thompson 2008). Shrinkage in airline ticket prices augmented the demand for airline travel. Many markets were simply deserted or over-looked by major network airlines; this is a region a fresh “second tier of service providers” could enter into. This endeavor proved to provide a consumer savings of billions per year. Thus in June of 1971, after a tumultuous battle with other Texas-based

US Airways completed a merger in December 2013 . This merger provided much needed cash infusion into American Airlines, enabling it to emergency from

So-called elite frequent fliers ” those logging the most miles ” began to get extra reciprocal benefits including priority boarding and free bag-checking on either airline. The airlines also gave members of their airport-lounge clubs access to each other's facilities. The changes are among the first that passengers will notice since American and US Airways merged last month and created a new parent company, American Airlines Group Inc. However, the two airlines will continue to operate separately for about two years until federal regulators approve combining the fleets. That means separate loyalty programs, reservations systems and websites. American Airlines shares rose 13 cents to $27.16 in afternoon

One major objective of mergers is to be able to reduce or fully eliminate the weaknesses that may exit in

This way of dealing with things may not go through as well with other organizations. Also this may sometime in the future not workout so well with American Airlines as well.