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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