It is expected that US Airways and American Airlines are going to merge in the near future, and this article highlights the challenges that are to be expected based on past airline merges. The article states that merging airlines is like merging two different cultures. This can be difficult because one culture is used to going about things one way, and the other culture has their own, different routine. An example of this is integrating the computer systems the airlines use to book and arrange flights. "This can take years to straighten out,"which probably means there are going to be some glitches resulting in lost luggage and decreasing customer satisfaction. In addition, employees are nervous about their job security with a big merge on the rise, which will effect their overall happiness with the new and changing management. If the pilots and staff are unhappy, there will be more of them calling in sick, delaying or canceling flights, according to two past significant airline merges. In addition, fares are likely to increase due to reduced competition.
http://money.cnn.com/2013/02/13/news/companies/airline-merger-problems/index.html?iid=SF_E_River
http://money.cnn.com/2013/02/13/news/companies/airline-merger-problems/index.html?iid=SF_E_River
4 comments:
"Airline service is all about the culture" is absolutely right. As Us Airways and American Airlines work towards this merger, I think that that will be the biggest challenge. Southwest did it right with creating such a magnetic and personable culture that they rank near the top on all of the customer service satisfaction surveys and employee morale surveys. The airline industry is not a place to get rich, which I believe that we will continue to see large mergers like this until we are left with a oligopolistic market with 3 or 4 airlines that own the entire market. Unfortunately, raising fare prices during cultural turmoil within the new airline I do not think will be the best move, but may be much more profitable in the long run due to main competitors merging.
Very interesting points. Some still believe that there are questions whether the merger is going to go through. As you stated, this merger will allow the new company to offer higher prices. It is funny, I was recently at the airport and I saw flight attendants checking their email and speaking to colleagues about how new merger changes employees benefits (vacation time, health provider, etc.) and they seemed concerned about the future of their employment/the new working conditions and benefits.
Great article and very good points. We usually do not think about the negative consequences that come with the various M&A activity. Although i doubt it would increase prices i do think it would surely bring about mass customer dissatisfaction especially with certain issues such as losing bags. I personally dont feel that this merger is particularly necessary especially if it would not be received well by the general public.
It seems as if this merger will do nothing but hurt the general public. Flying is already a difficult and stressful process for some and this merger will only make it more difficult, with problems such as lost luggage and an increase in ticket prices. I agree that it is not necessary and will most likely cause more harm than good for airline employees as well as the public.
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