Airline Mergers

running head : airline merging

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ABSTRACT

in todays airline business industry it is facing number of the challenges due to economic rescissions and as a result of the terror attacks in the US which clearly arose from the air based medium therefore the airline industry has been struggling to meet the financial stability unsuccessful due to the market trend . this gives only one alternative towards the success of the airline operations which is to consolidate the operations . but shambling blocks is the fact

that there have been mergers in the airline history but they never saw the light of the day . the failure may be attributed to inefficiency of the models used for airline merger that didn 't address the antitrust regulation labor relation issues and the international air traffic right issues this term looks at the airline merger processes of building a successful airline merger and the pros and cons of airline merger

INTRODUCTION

Airline in transport industry provides air transport to both goods and people but must have an operating certificate (Pat , 2007 ,

. 51 . In airline industry its characterized by leasing or owning of the air crafts in to provide services such as passengers or freight . The key operation system in airline is formation of partnership or alliances with other airlines to enhance economic benefits . Since November 16th 1909 the airline word was found up to today airline has been undergoing rapid changes to fit the demand of the customer and market demands (Regas , 2006 ,

. 321 . The recent development was in the year 2000 when there was a rapid growth of low cost airline leading to a new price practices from the initially high prices to low because of high competition within the industry . These can be referred to as fare simplification to a accommodate wide diversity of consumers which is working well since statistics shows that last year airlines carried 1 .5 billion passengers . The second change experienced in the industry it was the use of web based distribution of airline tickets in to increase the access of the customers to the fare information and promote the price transparency

Airline is unique in the business industry because of its characteristics . Airline operation tends to be capital intensive in such that it requires a lot of capital to set up or start , monitor and maintain the business . This is because of the nature of the business form the purchase , insurance , maintainace and fulfilling of the aircraft as one part . With the other part is the general business organization including staff , security and the airport issues . For instance the purchase of an aircraft Boeing 747-400F is 275 million which is expensive (Regas , 2006 ,

. 221 . This is a reflection of the needs in terms of cost of airline operations . As the airline is capital intensive the management should enhance a mechanical operation using technology to make it less labor intensive to minimize the cost of the running the business

Technology...