AIRLINE MERGER WAVES IN THE UNITED STATES: IS A MERGER BETWEEN AMERICAN AIRLINES AND US AIRWAYS POSSIBLE?

Open Access
Author:
Chao, Lap Chi Adriano
Area of Honors:
Supply Chain and Information Systems
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Robert Alexander Novack, Thesis Supervisor
  • John C Spychalski, Honors Advisor
Keywords:
  • commercial airlines
  • merger
  • acquisition
  • alliance
  • motivation
  • American Airlines
  • US Airways
Abstract:
Commercial airlines are an important part of the transportation industry in the United States. A better understanding of the reasons for a series of airline merger waves in the United States can help airline professionals realize the criteria and requirements of a merger. This study examined three recent U.S. airline mergers (i.e., Delta-Northwest, United-Continental and Southwest-AirTran) and deduced eight major dimensions of merger motivations, including network synergies, antitrust immunity, fleet commonality, alliance coordination, market positioning, financial benefits and shareholders’ approval, union support and organizational learning. The feasibility of a hypothetical merger between American Airlines and US Airways was determined using the eight dimensions derived. Results suggested that the merger was unlikely to increase the competitiveness of the two airlines. Findings demonstrated the importance of analyzing an airline merger from different perspectives.