Airline Merges

Airline mergers and acquisitions are on the rise across the globe. Theses mergers and acquisitions are highly strategic involving several considerations.

Moreover airline mergers and acquisitions bear serious implications for travelers as well as airline employees. Important issues related to airline mergers and acquisitions are time, approvals, efficiency, competition, passenger benefits and strife.

The airlines industry is abuzz with news of mergers and acquisitions. In the last few years airline mergers and acquisitions have been a growing trend in several countries across the globe. However mergers and acquisitions in the aviation industry are highly strategic in nature and are undertaken after taking into consideration several importantfactors.

Some of the important factors considered by airlines in taking merger and acquisition decisions are -

• The coverage area of the other airline. Strategically an airline would like to merge with or acquire an airline that operates in routes different from its own. This helps in expanding service coverage and avoiding overlapping of flight schedules.

• The quality of service and brand image of the other airline.

• If the other airline has any partnership with a rival group of airlines.

From the point of view of customers mergers and acquisitions may lead to increased airfares. This is because mergers and acquisitions reduce the number of operators thereby reducing competition and pushing up prices in the aviation industry.

Airline mergers and acquisitions also have important impacts on the employees of the participating airlines.

The major concerns that airline employees are faced with in case of mergers and acquisitions are -

• Layoffs - Mergers and acquisitions in most cases are accompanied by layoffs.

• New job rules.

• Salary concerns - The new acquiring airline or the new group arising out of a merger may not pay the old salaries.

• Pensions and other benefits.

• Seniority - A...