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Evaluation of the Pending Merger of American Airlines and US Airways - Research Paper Example

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Evaluation of the Pending Merger of American Airlines and US Airways

The Pending Merger of American Airlines and US Airways U.S. Airways and American Airlines are set to merge so as to form the largest airline across the entire globe. There is a proposal to settle the matter with Justice Department over an antitrust lawsuit on their merger which is projected to cost US$17 billion (Johanson, 2013). Assent of the plan to merge the two airlines is seen as a potential for resolving competition issues while at the same time contribute to creation of the largest global airline. An in-depth evaluation of the planned merger indicates that there are certain things which are pertinent in case a settlement of the matter happens. One of the prospected outcomes from the pending merger of the two airlines is that more slots for airports will be experienced for cheaper carriers in the American airline market. The two airlines will have to separate slots and facilities relative to airline costs to realize improved competitive advantage in airline industry (Feldman, 2013). This implies that the merger will lead to co-ordination that will see it control at least 80 per cent of American commercial market in airline business network. The merger of the two US airlines will also gain slots for cheaper carriers across the US. ...
g for ease bearers at key US airstrips, this settlement guarantees air transport travelers that they will see more rivalry on persistent and interfacing tracks all around the nation. Therefore, there will be increased competition in American airline industry which will then benefit millions of airline customers following improved airline travelling options and reduced travelling costs in the airline industry. Other airline players such as JetBlue and Southwest Airlines will have an opportunity to gain in the airline industry (Portillo, 2013). This is because American and US Airways will leave out some slots as well as facilities in various airports. This will at the same time increase competition in the American airline business market. Settlement of the merger is also deemed to bring disruption in the mutual relationships that have always existed among legacy carriers. Furthermore, it will increase accessibility to major airports which have previously had cases of congestion. There will also be provision for varied choices to the airline consumers while also enhancing airline fares accruing from increased competition in the airline industry on all national flights in the US (Feldman, 2013). Some of the already existing airlines will win big from the Justice Department on divestiture settlement process since they presently operate on leasing out of slots from American Airlines. Other airlines also stand chances to have their shares in the American airline market rising. The pending merger will see the New American airline becoming the largest global carrier. It will actually be the leading carrier in the world with regards to offering more comprehensive networks across the globe (Johanson, 2013). The same will be true with their services in terms of business excellence ...Show more

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Evaluation of the Pending Merger of American Airlines and US Airways Name: Institution: Evaluation of the Pending Merger of American Airlines and US Airways Introduction Recently, mergers of airlines have been on the rise across the globe with a n umber of airlines coming together…
Author : uswaniawski
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