Airline Mergers Essay Example | Topics and Well Written Essays - 1750 words

Airline Mergers - Essay Example Over the years, the number of airlines have been intentionally narrowed down to just a few major airlines. Narrowing down of the airlines have been actualized by mergers that have taken place over the years. The number of mergers have been exceptionally high. This has resulted in creation of some of the world huge airlines. Mergers happen in order for the two partners to gain a certain leverage that was not there before. Universally the reasons behind most of this unions are known. The main reasons include-: 2. Cutting cost- this might be the biggest motivator if not among the best factors. The situation can be looked as previous competitors marrying. This means that we will not have price wars into the future and costs of advertising automatically drops. 3. Surviving- it is a last resort on most companies, it is usually a case of staying in the business or being driven out of business. Therefore when a company is bankrupt or does not have the capability of surviving the tough market forces, merger come through as the only remedy. 5. Competitive advantage- it is a huge factor. Companies are able to reach out to market traditionally not accessed. Therefore this creates a headache for other players since the new merger brings with it financial might. 7. The reasons behind the mergers in the USA airline industry are factored in the above explained reasons. Mergers are nice for business but they are not immune to the law. It is normally a case of trending carefully in order not to break the laws of consumerism in the name of mergers. Therefore, it was not by mistake that in 2013 the government of the USA with support from numerous consumer federations filed a law suit stopping the merger between the mighty American and the mighty US air. The previous mergers that ever occurred did not raise as much issue and outcry as the