Merge of American Airlines and Us Airways Essay Example for Free

Merge of American Airlines and Us Airways EssayThe buzz in the airline industry in February 2013 was all about the potential conjugation between American Airlines and US Airways since that would make the unite company the number one airline in the industry globally. Despite the some cynical comments veteran investors hold for investing in the airline industry, which bequeath be mentioned below, as rise up as the unforeseen lawsuit being thrown at their way, it is an enthronization that is strongly suggests a profitable investment in the long run. First of all, the potential profitability of the union could be foreseen by reviewing past cases of airlines amalgamations such as the merge between get together Airlines and Continental Airlines as wellhead as Delta Airlines and Northwest Airlines. Delta Airlines and Northwest Airlines merged in 2008 and United Airlines announced their merger with Continental Airlines 2 years later in 2010. Delta was not profitable right off th e bat later on their merger only when took them a few years to turn things around balancing with the economical posture and oil prices. Most pros consider the industry untouchable because the airlines take historically operated irrationally and have evermore been at the mercy of oil prices, unions and new competition(Feinberg, 2013) but then again Feinberg says that United, Delta as well as US Airways have been making money for the past three years and may compass record profits in 2013 (Feinberg, 2013).Post merger of United Airlines and Continental Airlines, the parent company of United Airlines, one of the worlds largest carriers, reported a $448 million quarterly net loss, pressured by high fuel cost and expenses related to problems integrating some operations of United in its merger with Continental Airlines(2012). But the problems come in to be largely over. So far this year, United shares are up 22%, the SP 500 king is up 14.5% and Delta shares are up 66%. No doubt, Sm isek seeks room to grow (Reed, 2013). United is also sounding to enhance their services for corporate customers by revamping its aircraft that fly from JFK to Los Angeles and San Francisco, adding flat bed seating and faster, complimentary Wi-Fi to its subsidy sections. American is adding state-of-the-art Boeing 777-300ER aircraft to its fleet, the largest new aircraft used by a U.S. carrier since1990. Its premium cabin has a walk-up bar stocked with snacksa first for any U. S. airline, the company boasts (Fickenscher, 2013). Another crucial factor that indicates sustainable growth are the soft skills A new American Airlines combining US Airways is fortunate to have US Airways chief operating officer Doug Parker at the helm, because he appears to understand not just the nuts and bolts of merging logistics systems but also the human process of ego suppression. This would be the second time his smaller airline has merged with (taken over, some would say) a larger one, and the second time he has let go of the identity of the enterprisingness he built (HBS Working Knowledge at Forbes, 2013). Creating an executive management team that is functioning well as a strong team is crucial to an MA situation. They also need to have a clear vision of the company in order to overcome all the minor speed bumps they ordain inevitably go through with the merger. Currently, American Airlines and US Airways are facing on going lawsuits against the US Justice department. Depending on the outcome of this lawsuit, American Airlines will either move on with their original merger plan or if blocked, then they would have to reorganize a new plan while operational in bankruptcy.ReferencesFeinberg, Andrew. 2013. News Flash Airlines Soar. Kiplingers Personal Finance 67, no. 7 38. byplay Source Complete, EBSCOhost (accessed family 15, 2013).2012. United Continentals Loss Widens, but Less Than Expected. New York Times, April 27. 4.Regional Business News, EBSCOhost (accessed September 15, 2013).Reed, Ted. 2013. No Wonder Uniteds CEO Is Buying United Stock. Forbes,com, September 1. Accessed September 15, 2013. http//www.forbes.com/sites/tedreed/2013/09/01/no-wonder-uniteds-ceo-is-buying-united-stock/.Fickenscher, Lisa. 2013. Mergers put biz travelers in first class. Crains New York Business 29, no. 27 3. Regional Business News, EBSCOhost (accessedSeptember 15, 2013).2013. Big Deal Reflections on the American and US Airways Megamerger. Forbes.com 10. February 19. Business Source Complete, EBSCOhost (accessed September 15,2013).