The US airline industry has experienced considerable merger and acquisition activity since its early years; especially following deregulation in 1978. Figure 1 provides a timeline of mergers and acquisitions for the four largest surviving airlines based on passengers served from 1920s to 2010s (GAO,2013). Source: GAO (2013)
Figure 1: Highlights of US Domestic Airline Mergers and Acquisitions, 1920s – 2010s
2. Case Study: American Airlines Today, American Airlines is one of the largest airlines in the world. Valued at $ 11 billion, it operates an average of 6700 flights daily and serves more than 330 destinations in 54 countries from its hubs in United States. On 9th December 2013, American Airlines Group Inc. …show more content…
Source: (Morgan et al, 2013)
Figure 7: AMR SWOT Analysis
3.5. What were people saying?
The opinion on this deal doesn’t seem to be shared. Some thinks it is necessary while some don’t agree. The critics of the deal argued that this merger might result into a reduced competition, less choice and higher fares. Kevin Mitchell, chairman of the advocacy organisation of the Business travel Coalition argued that the proposed merger could significantly reduce competition in the industry (US News, 2013)
Combining the revenues of AMR and US Airways would move the merge carriers to the top. The industry evolved and because of consolidation, there is no way a small carrier which AMR has become can compete with Delta and United. AMR will be able to survive as a stand-alone carrier but only for a few years. (Robert Herbest , Analyst , Airlinefinancials,com , August 2012)
AMR’s decision to consider a merger is something we have been pushing for. We firmly believe that the only way the company can grow and compete is through merger. Laura Gladin, President of Association of professional flight attendants, July
Figure 1: Highlights of US Domestic Airline Mergers and Acquisitions, 1920s – 2010s
2. Case Study: American Airlines Today, American Airlines is one of the largest airlines in the world. Valued at $ 11 billion, it operates an average of 6700 flights daily and serves more than 330 destinations in 54 countries from its hubs in United States. On 9th December 2013, American Airlines Group Inc. …show more content…
Source: (Morgan et al, 2013)
Figure 7: AMR SWOT Analysis
3.5. What were people saying?
The opinion on this deal doesn’t seem to be shared. Some thinks it is necessary while some don’t agree. The critics of the deal argued that this merger might result into a reduced competition, less choice and higher fares. Kevin Mitchell, chairman of the advocacy organisation of the Business travel Coalition argued that the proposed merger could significantly reduce competition in the industry (US News, 2013)
Combining the revenues of AMR and US Airways would move the merge carriers to the top. The industry evolved and because of consolidation, there is no way a small carrier which AMR has become can compete with Delta and United. AMR will be able to survive as a stand-alone carrier but only for a few years. (Robert Herbest , Analyst , Airlinefinancials,com , August 2012)
AMR’s decision to consider a merger is something we have been pushing for. We firmly believe that the only way the company can grow and compete is through merger. Laura Gladin, President of Association of professional flight attendants, July