Airline mergers

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Case Study #1: Airline Mergers

Due: 2/24/2020 11:59 PM

The case study must be a minimum of 4 typed pages (APA format, double-spaced, 1” margins, Times New Roman, font size of 12). Students are expected to use critical thinking and outside resources to give a thorough and thoughtful response. All references must be cited.

Airline mergers have dominated the industry since the ADA of 1978. This can largely be blamed on the highly competitive and volatile industry the ADA created. These mergers slowed after the initial onslaught of bankruptcies and re-structuring until the 2000’s when they kicked back up again. The reasons for these mergers vary from case to case.

United and Continental merged forming the largest passenger airline in the world (at the time). Southwest and AirTran merged giving Southwest an international presence, Delta and Northwest merged in 2009, Alaska and Virgin America in 2016. The list goes on and on.

Today we have 4 major carriers that control roughly 70% of the market share.

Please select one of the major US mergers/acquisitions since the year 2000 and answer the following questions:

1. What events led up to this merger/acquisition?

a. Ie. What drove this decision? Bankruptcy, consolidation, increase market share, etc.

2. Was this merger good for the consumer?

a. In terms of quality of service?

b. In terms of ticket prices?

c. How is this different in smaller markets vs. larger markets?

3. How did the merger affect the employees of both airlines? Explain.

4. How has this particular merger impacted the industry as a whole?