American Airlines – US Airways Merger




Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

ABSTRACT

The case discusses the merger of the US-based American Airlines (American) and US Airways. The merger, announced in 2013, took two more years for complete integration. The new entity retained the name American Airlines and emerged as the largest airline company in the world. The company reported a net profit of US$ 1.7 billion in the third quarter of 2015, beating the predictions of analysts. Experts were skeptical about the outcomes of the merger being favorable. Both American and US Airways, in the course of their journeys, had undergone financial bankruptcy and were badly hit by the terror attacks in 2001. While American was struggling with labor union turbulence, US Airways set a strategy to merge with it. Although initially there was resistance from Thomas W. Horton, CEO of American, the major labor unions forced the company into the deal... ...

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Issues

The case is structured to achieve the following teaching objectives:

  • Discuss the concept of mergers in the context of business strategy.
  • Analyze the motives behind mergers.
  • Examine the post-merger integration challenges.
  • Get an insight into the changing dynamics of the US aviation industry
  • Analyze merger as a strategy to face competition
  • Understand merger as a growth strategy
  • Study the problems a merger can bring with it
Contents
INTRODUCTION
BACKGROUND NOTE
ON THE ROAD TO A MEGA MERGER
INDUSTRY RESPONSE
THE INTEGERATION
LOOKING AHEAD
EXHIBITS

Keywords

Airlines, Bankruptcy, Merger, Synergies, Post Merger Challenges, American Airlines, US Airways, Organizations merger, Strategy,M&A strategy, Post merger integration

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