Friday, November 1, 2019
Analysis and evaluation of strategic choices in the airline industry Essay
Analysis and evaluation of strategic choices in the airline industry - Essay Example According to Barrett (2010), the airline industry has embraced mergers and acquisitions that have seen leading airline companies combine, or even own other companies in the quest to expand their investment, as well as, counter the ever changing environment; of this type of business venture. In the period of 2004-2011, a number of Mergers and acquisitions were encountered in this industry. For purposes of proper and effective analysis, few cases have been chosen in this study and will be looked at in the following section. According to Transatlantic airline alliances (2010), the airline industry can be described as complex and volatile; major crises face this industry like, fuel prices, world and regional economies. MERGERS AND ACQUISATIONS Mergers in the airline industry are a reality in the business world. A number of mergers have been experienced in this industry notably with the popular airlines as well as the smaller airlines. According to Barrett (2010), history has shown that s ubstantial airline mergers yield inconsiderable results at their best. This paper looks at two mergers that occurred in this industry between the years 2004 and 2011- merger of British Airways-Iberia and the Continental-United merger. This paper aims at evaluating the strategies behind these decisions, projected achievements and what prompted the companies in this industry to come up with the ideas of mergers and acquisitions. On critical analysis of the above mergers, various reasons can be deduced for coming up with the merger strategy. British Airways mergers and acquisitions The tough global economic situations being experienced has seen British Airways get into mergers and acquisitions as a way of trying to remain on board. British Airways has made four acquisitions, has taken no... The intention of this study is merger in the airline industry. A number of mergers have been experienced in this industry notably with the popular airlines as well as the smaller airlines. History has shown that substantial airline mergers yield inconsiderable results at their best. This paper looks at two mergers that occurred in this industry between the years 2004 and 2011- merger of British Airways-Iberia and the Continental-United merger. With a rise in joint ventures and strategic alliances popularity, their complexity and range of alternatives also increases. Thus, there is profound necessity for advisers to alert the parties in the airline industry the probable occurrences in the future. There is also need to understand the various circumstances and structures associated with these ventures and alliances. Structures of ventures include; an incorporated company, partnership and trading trust. Strategic alliances are less formal; also they might involve collaboration agreement. All ventures in general have one thing in common which, involve the fundamental aspect of a relationship working. Joint ventures and strategic alliances have continued to be in style world wide across all industry and specific to the airline industry. Notable points in the realization of effective and strategic achievements in this area are; legal advisors of mergers and acquisitions have the obligation of keeping up date with the ways and changes of the idea at hand. This will ensure that companies get to know both the profit and the risks behind getting into mergers and acquisitions, as well as, combined ventures and strategic alliances.