...across the merger between United and Continental airlines. The reason that I choose to do the merger is because I knew that they were going to go through many changes within this merger. Both airline companies have a lot to offer to each other with this merger that they can compete with Delta airlines one of the largest airline in the world. This merger will bring about several changes within both companies. In this paper I will be providing the different changes between both companies with the merger including the culture, systems and unions. Since they were two different companies this will bring on big changes when they finally merger together. History In In the year of 2008 United Airlines CEO Glenn F. Tilton and Continental Airlines, CEO Jeffrey A. Smisek began to talk about merging both company together in order to become the largest merger ever to take place between two airlines. However, once Continental found out about United Airlines declining financial statues they declined their offer. The talk of United negotiating a merger with US Airways stunned the CEO and board members of Continental Airlines. Predictor stated that United Airlines used this tactic to allure Continent Airline to renegotiate the merger that was discussed in 2008. In 2010 a big announcement was presented stating that United and Continental airlines were merging together as one Airline Company. Major of the management team will consist of Continental executives. This merger is just another...
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...across the merger between United and Continental airlines. The reason that I choose to do the merger is because I knew that they were going to go through many changes within this merger. Both airline companies have a lot to offer to each other with this merger that they can compete with Delta airlines one of the largest airline in the world. This merger will bring about several changes within both companies. In this paper I will be providing the different changes between both companies with the merger including the culture, systems and unions. Since they were two different companies this will bring on big changes when they finally merger together. History In In the year of 2008 United Airlines CEO Glenn F. Tilton and Continental Airlines, CEO Jeffrey A. Smisek began to talk about merging both company together in order to become the largest merger ever to take place between two airlines. However, once Continental found out about United Airlines declining financial statues they declined their offer. The talk of United negotiating a merger with US Airways stunned the CEO and board members of Continental Airlines. Predictor stated that United Airlines used this tactic to allure Continent Airline to renegotiate the merger that was discussed in 2008. In 2010 a big announcement was presented stating that United and Continental airlines were merging together as one Airline Company. Major of the management team will consist of Continental executives. This merger is just another...
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...Journal of Industrial Organization Education Volume 5, Issue 1 2010 Article 1 United-Continental Merger Robert J. Carbaugh, Central Washington University Koushik Ghosh, Central Washington University Recommended Citation: Carbaugh, Robert J. and Ghosh, Koushik (2010) "United-Continental Merger," Journal of Industrial Organization Education: Vol. 5: Iss. 1, Article 1. DOI: 10.2202/1935-5041.1034 Unauthenticated | 62.189.189.132 Download Date | 6/6/13 12:08 PM United-Continental Merger Robert J. Carbaugh and Koushik Ghosh Abstract This case study discusses the nature and likely effects of the proposed merger between United and Continental. It is intended as a lecture for instructors teaching undergraduate courses in Industrial Organization or Antitrust Economics KEYWORDS: United, Continental, Merger, Antitrust Unauthenticated | 62.189.189.132 Download Date | 6/6/13 12:08 PM Carbaugh and Ghosh: United-Continental Merger United-Continental Merger On May 2, 2010, the Boards of Directors at United Airlines and Continental Airlines approved a stock-swap deal that will combine them into the world’s largest airline. The combined carrier will have 21 percent of domestic flying capacity, taking the lead from Delta Air Lines, which will lose what had been its leading 20 percent share of the domestic market. The deal still needs final approval from the U.S. Department of Justice and shareholders before being allowed to go forward. The firms hope to complete...
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...Marketing Plan United Continental Airline Marketing Plan Rhunda Mitchell BUS620 Instructor Nichols August 1, 2011 The airline industry has continuously been and is steadily the most intensely competitive business segment in all components of its operations (Morrison, 2000). In commission on real narrow margins the decline in passenger traffic which was embraced by airlines due to the events of September 11th, 2001 has had a direct effect on the many domestic and global airline carriers across The United States (Taylor, 2003). The events that occurred that day created governmental intercession by means of loan assurances, recompense for terrorist attack fatalities, and insurance associated with war hazards (Taylor, 2003). The Associate deputy secretary of Transportation stated that the industry is in its worst financial crisis” (Taylor, 2003), since the industry was deregulated in 1978 (Taylor, 2003). It is imperative to recognize the two conflicting forms of airline carriers within existence in the United States (Taylor, 2003). The major airlines are in reference to those with surplus gross revenues of $1 billion dollars yearly. In general these airlines also provide international services, accommodate the business class customers and passengers who anticipate or covet full in flight services like meals and other related amenities (Morrison, 2000). This includes; American Airlines, Delta Air Lines, United Air Lines, U.S. Airways, Continental Airlines and Northwest...
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...the Financial Hood Continental Airlines Continental Airlines (Continental) was incorporated in 1980. Based out of Houston, Texas, Continental Airlines is fifth largest airline in the world. This is based on the 2009 number of scheduled miles flown by revenue passengers (SEC1). Continental and its smaller divisions offer more than 2,750 departures in the Americas, Europe and Asia. Continental currently employs more than 43,000 people. More than 67 million people per year choose continental as their chosen air carrier (Unknown2). With such a big company comes incredible opportunity for large amounts of profit to be made or lost. Current Happenings Recently, Continental merged with former competitor United. The merger took place May 3, 2010. This merger was created to provide customers with a higher quality of service, improve career opportunities within the company and to improve profitability and shareholder value over a longer term (Unknown2). The related costs associated with the merger, and other unique charges, was $24 million. The majority of these costs were related to financial advising fees, legal fees, and consultant fees, cost of communication and accounting fees. The merger is expected to bring between $800 million and $900 million in revenue annually (Unknown1). Current Financial Performance – 2010 The second quarter for 2010 proved to be extremely profitable for Continental in comparison to the same quarter in 2009. Including the merger-related costs, a net...
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...United Continental Holdings, Inc. Business Analysis Melissa Alamilla MGT 521 May 16, 2012 J. Merryman United Continental Holdings, Inc. Business Analysis The airline industry has had a few disappointments at the market with the economy fluctuations. Since September the 11th, the airlines are struggling to recover from all the destruction that the terrorist did to the airline industry. Customer’s confidence, high fuel prices, environmental problems, and customer service issues are just a few things that have affected the airlines popularity in the public’s eye. With all that said, how would a mutual fund investor feel about investing in an airline? The mutual funds manager is looking at United Continental Holdings, Inc. as a future investment. The mutual funds investor will being with a complete business analysis of the airline. He will investigate how well the airline is doing. He will look at their annual business reports (balance sheet, statement of cash flow, and income statement); complete a SWOT analysis showing the strengths, weakness, opportunities, and threats, global strategies and their technological advantages. After completion of those items, he will check how well the airlines operational processes and procedures are, the airline practices, and how the airlines product and services compare to their competitors. The mutual funds manager will need some background information on United Continental Holdings, Inc. In 2010, an historic merger...
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...The main cause that makes a company have to make changes is the external environment. It usually forces organizations to make changes to its mission, culture, leadership, and operating strategies. Changes in the 12 drivers bring a series of change to the overall structure. Changing anyone of the 12 “pillars” will influence the adjoining ones. But, changing the entire structure may or may not affect the entire system. These changes are influenced by the motivation of the individuals. They will impact the change to the entire organization. They all interact with each driver on the model. The Burke-Litwin Model has these basic parts that make up an overall change for a company. Change effect one part and then affect the overall performance of the model. 1. External environment: The key external cause on the organization must be identified and clearly established. 2. Mission and Strategy: The overall “vision” should be seen through the eyes of the employee. 3. Leadership: Leadership should be understood. 4. Organizational Culture: This should understand implied rules, regulations, customs, principles, and values. 5. Structure: The function based structure should be understood, such as responsibility, authority, communication, decision, making, and control structure. 6. Systems: This includes all the policies and procedures. 7. Management Practices: How the management accepts and conforms to the overall concept of the organizations strategy. ...
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...We have a positive fundamental outlook for the airline industry. In 2009, the S&P Airlines Index increased 27.43%, versus a 29.03% rise for the S&P 500 The airline industry is highly cyclical, and the level of demand for air travel is correlated to the strength of the U.S. and global economies. According to the S&P, it is expected that an improving U.S. economy continues to drive improving air travel demand over the next few months beginning at the end of 2009. At the end of 2009, the reported traffic statistics at many major carriers showed improving demand and revenues . Therefore, it is reasonable that the U.S. airline industry could be undergoing the start of fundamental industry demand improvement. In addition, since the industry has already reduced capacity levels, it should be able to raise fares as passenger travel demand improves. Even though oil and jet fuel prices is up sharply from 52-week lows, they are still notably lower than in 2008 , which should ease cash usage throughout the group and allow good entry points into new fuel hedge positions, thereby offering protection if oil spikes again. According to S&P, the top 10 U.S. carriers lost about $5 billion in 2009, after a $4 billion loss in 2008, as the benefit of lower jet fuel costs was eroded by lower airfares and falling passenger levels. Results in 2008 were impacted by record high oil prices. Airlines have cut fares in response to weakening demand, but we think recent cuts to domestic and international...
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...answering questions 1 through 5. 1. (35 points) Combining Continental and United Airlines is tremendously difficult, largely because of the enormous number of things two airlines may do differently. Employees from both Continental and United are working side by side to answer many questions. Will passengers board flights back to front or window, middle, then aisle? Will miniature ponies be allowed? What information will be printed on a boarding pass? What direction will dog crates be faced when loaded in to cargo? Continental and United business architectures are unique to each company. Describe specifically what “the new United,” as a merged airline, must do to form the business architecture for the largest carrier in the world. Make sure you include in your description the role of standardization and integration in transition from the current As-Is to the emerging To-Be business model. | 2. (35 points) Information technology tends to be the thorniest part of an airline merger. The flight information systems and the passenger information system are critical applications (systems) supporting airline operation. Jeff Smisek, Continental CEO, was named the head of “the new United,” and he has heard a lot about cloud computing and virtualization. Mr. Smisek has learned that competitors are implementing cloud computing and virtualization concepts to streamline IT operation and alignment. In order to expedite merger and integration, Mr. Smisek assigns you the task of defining...
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...United Airlines vs. Delta Airlines Ushma S. Patel 3/31/2013 Ushma821@gmail.com Work Cited 1. Introduction 3 2. United Airlines vs Delta Airlines 4 3. The Four-Frame Model 8 4. SWOT Analysis- United Airlines 12 5. SWOT Analysis- Delta Airlines 14 6. Analysis 15 7. Recommedations 16 8. Work Cited 17 INTRODUCTION In evaluating two companies who have had to restructure their business models to evolve to changing times I choose United Airlines and Delta Airlines. Both companies filled for bankruptcy in the early 2000’s and since then have nursed their company back to health and to becoming the industries leaders for airlines. I choose these two airlines because I frequently use them to travel. My family are also huge travelers and I spend a lot of time looking for the best deals for them. United Airlines filed for bankruptcy in 2002 and would become the longest case in the United States lasting until 2006. The airline was able to get their reorganization plan approved by the United States government by restructuring their management plan. In the restructure they also changed how their bonus plan was organized for successful executives. They also had to evaluate their employee’s efficiency while on the clock. They were able to reduce their workforce from 100,000 employees to half of that. Finally the airline had to revaluate the routes they were taking and then see which ones...
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...Antitrust Law Anti-trust law is a law designed to ensure free competition in an open market. The first anti-trust laws have emerged in the United States at the end of 19th century: some companies were so powerful that they had a monopoly or quasi-monopoly in the sector. Companies like Standard Oil and American Tobacco have been dismantled through anti-trust laws. In addition, the antitrust laws prohibit price fixing between competitors. In 1934, Boeing became a large enterprise, producing aircraft engines, carrying mail, dealing with airports and ensuring many airlines. But under pressure from anti-trust law prohibiting manufacturers to operate airlines, its creators sold their holdings and "United Aircraft and Transport" got divided into three entities: * United Airlines responsible for air transport * United Aircraft responsible for manufacturing in the East * Boeing Airplane Company responsible for manufacturing in Western countries. United Aircraft and Transport Corporation is a vertically integrated group, present in all sectors of aviation. In 1934, an anti-trust law is to separate aircraft manufacturers companies carrying mail, and forces the company to split into three entities, * United Air Lines in 2011, which is the largest airline in the world * United Aircraft Manufacturing Corporation, which later became the United Technologies Corporation * Boeing Airplane Company, which became in 1941 The Boeing Company. Case example of Air France / KLM ...
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...WHY CONTINENTAL: A $385 million loss for the final months of fiscal year 1994 signalled Continental might go bankrupt. Continental was in dire straits because the deregulation of the commercial airline industry in 1978 ushered in a new era focused on mergers and acquisitions and bitter employee-management relations. Venerable airline brands with a commitment to quality, like Continental, were prime takeover targets. After Texas Air Chairman Frank Lorenzo (HBS 1963) secured Continental in his hostile takeover bid, tensions escalated between Lorenzo and the old guard--especially when Lorenzo declared Continental bankrupt in the fall of 1983. In October 1994, five months after Continental exited its second bankruptcy, Bethune was elevated to CEO and created a Go Forward Plan to return Continental to profitability. Two years after unveiling the Go Forward Plan, Continental was at the top of the industry in a number of important performance metrics. KEY ISSUES: Continental ranked tenth out of the ten largest U.S. airlines in all key customer service areas as measured by the Department of Transportation: on-time arrivals, baggage handling, customer complaints, and involuntary denied boardings. The airline had already been in bankruptcy twice, and was headed for a third round as its cash dried up. STRATEGIES FOLLOWED FOR TURN AROUND: The turn-around plan — the Go Forward Plan 'A' — had four different elements each of which were given an inspirational title : ...
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...Quality Management at United Airlines Brandon L. Smith Keller Graduate School of Management GM 588 6/20/2012 Dr. Kim Hunley INTRODUCTION United Airlines is a major airline based in the United States and one of the world’s largest airlines. It was formed in 1934. It is a subsidiary of United Continental Holdings Inc. Its headquarters are located in Chicago, IL. United is a founding member of the Star Alliance, the largest alliance in the world. On October 1, 2010 United and Continental airlines merged together forming the world’s largest airline in revenue passenger miles and second largest in fleet size and destinations. “The new United will offer customers an enhanced travel experience, combining the best products and services each carrier has to offer,” (The World's Leading Airline, 2012). The airline is supposed to be the airline that customers want to fly, the airline employees want to work for and the airline shareholders want to invest in. The key highlights of the merger are the following: * World’s most comprehensive global network, including world class international gateways to Asia, Europe, Latin America, Africa and Middle East with non-stop or one stop service from virtually anywhere in the United States * Most modern and fuel-efficient fleet and the best new aircraft order book, among U.S. network carriers * Industry-leading frequent flyer program that will provide more opportunities to earn and redeem miles worldwide *...
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... 6/15/2011 | INTRODUCTION United Airlines is a major airline based in the United States and one of the world’s largest airlines. It was formed in 1934. It is a subsidiary of United Continental Holdings Inc. Its headquarters are located in Chicago, IL. United is a founding member of the Star Alliance, the largest alliance in the world. On October 1, 2010 United and Continental airlines merged together forming the world’s largest airline in revenue passenger miles and second largest in fleet size and destinations. “The new United will offer customers an enhanced travel experience, combining the best products and services each carrier has to offer,” (The World's Leading Airline, 2011). The airline is suppose to be the airline that customers want to fly, the airline employees want to work for and the airline shareholders want to invest in. The key highlights of the merger are the following: * World’s most comprehensive global network, including world class international gateways to Asia, Europe, Latin America, Africa and Middle East with non-stop or one stop service from virtually anywhere in the United States * Most modern and fuel-efficient fleet and the best new aircraft order book, among U.S. network carriers * Industry-leading frequent flyer program that will provide more opportunities to earn and redeem miles worldwide * Optimal hub locations in 10 cities, including hubs in the four largest cities in the United States As of right now the two...
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...Merger, Acquisition, and International Strategies 1 Merger, Acquisition, and International Strategies Sharia Hendeson Professor Rebecca Letellier Business 499 December 2, 2012 Merger, Acquisition, and International Strategies 2 Bank of America and NationsBank The renamed to Bank of America combined assets of $570 billion. To protect against perceived to be monopoly dangers, federal regulators wanted 13 branches divested in New Mexico, and the towns. The towns left with just one bank when the merger was complete. Bank of America becomes the largest bank holding company in America, and the second largest bank when ranked by market capitalization. Their 2008 acquisition of Merril-Lynch also solidified Bank of America as a serious force in investment banking. The merger provides much revenue potential combined with no earnings and low to shareholders, establishes a company that will have $570 billion in assets, $45 billion in shareholders' equity and a market capitalization of $133 billion. The merger expected to close in the fourth quarter of 1998; the company had relationships with 29 million households in 22 states across the nation and served two million businesses in the United States and 38 other countries. Its 180,000 people will live, work and participate in thousands of communities across the country. http://www2.prnewswire.com/cgi-bin/stories...
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