It is well known that one of the biggest merger and acquisition in airline industry between United Airline and Continental Airline in 2010. After this merger and acquisition, the new company becomes the largest airline in the world.
However, we cannot only focus on the shiny side of the coin. There are some issues happened because of the merger and acquisition.
One of these issues is the lose of talent. Some employees quit their jobs because of the new policy of staff welfare. Due to the new policy of staff welfare, the employees in high position but with short length of service cannot use standby tickets any more. Some employees quit their jobs because of their new bosses. The paces of work in Continental is obvious slower than the paces of work in United. After the merger and acquisition, some Continental employees work for their new bosses from United. If employee A is on vacation, and the part which is he in charge of is down. Instead of waiting him come back to fix the issue after 5 days, the boss from United will ask employee B using 3 days to learn how to fix it. It makes employee B very nervous. As the paper I reference, because of the differences between two computer systems, there are some computer issues happens after the merger and acquisition.
These are small problems. I believe the new company will become increasingly better.
Reference:
http://money.cnn.com/2012/11/15/news/companies/united-continental-computer-delays/index.html
http://www.businessweek.com/ap/2012-08-28/united-airlines-struggles-with-computer-problems
http://usatoday.com/story/todayinthesky/2012/11/05/united-dreamliner-inaugural/1682693/
Monday, November 26, 2012
Sunday, November 25, 2012
United and Continental to merge
In 2010, there was a big merger and acquisition in
airline industry between United and Continental to create the largest airline
in the world. $3 million was the price for the combination with an expected
revenue $29 billion annually and cost save round $1.1 billion in the next three
years.
However, the merger was not as
simple as people thought. Although United and Continental were in the airline
industry, making changes was an important issue in order to fit them in
together. Continental employees would work with United colleagues. Meetings
were taken place to make decisions on activities, culture, and style of the new
United. Despite of financial health of airline industry, squeezed oil price,
price-sensitive customers, the combination of two large airlines will help the
management to look back and figure out how to make things right.
To prepare for these outcomes,
practicing managers should have a good solution on re-examine and re-arangement
things. This is a complex business that the new company has to work on people
issues, technology issues, facilities issues, fleet issues, etc. which could
take several years. However, retaining existing values of both airlines is a must to keep faithful customers and seek
for potential passengers.
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