Us Airways and American Airlines Merger Essay
was thus the #5 player in the market, with the two airlines behind it in market share (JetBlue and Alaska) gaining in market share. Thus, US Airways was vulnerable competitively, and financially. The merger was long-rumored, and apparently only held up on account of legal issues surrounding the American Airlines bankruptcy. Industry Analysis The modern era of US airlines began with deregulation in the late 1970s, a move that brought substantially more competition to the marketplace and dramatically increased industry capacity. The resulting environment was incredibly competitive, with at least ten major carriers. The result was predictable – overcapacity and a lack of ability for companies to turn a profit. Airlines have high fixed costs and need to fill capacity as much as possible in order to cover those fixed costs, because planes cost money whether or not… Continue Reading...
