Analyzing and Assessing a Case Essay

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airline industry is one of the most competitive industries in the world. American Airlines and U.S. Airways are one of the biggest airlines in operation in the United States. At the outset of the year 2013, American Airlines and U.S. Airways came to the agreement of a merger that would generate and form the biggest airline in the whole of the United States. With the two companies together, stakeholders of U.S. airways would attain twenty-eight percent of the shares of the new companies, while on the other hand, stakeholders of American Airlines, personnel, unions as well as creditors would attain seventy percent of the equity of the new airline. The resulting airline would convey the name and branding of American Airlines, whereas the holding company would be given a new name, American Airlines Group Inc. With regard to U.S. Airways, the company would retain a great deal of aspects, including its Chief Executive Officer (CEO) and also majority of the job positions in operations management. Lastly, a consolidation of the new airline's center of operations would be set at the prevailing head office of American Airlines (Jones, 2013).

Key issues

One of the key issues in this merger is the fact that American Airlines was facing bankruptcy since the year 2011. For the past decade, the airline had experienced losses of more than $12 billion.

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Taking into consideration the situation of American Airlines, in terms of operating financially and the resultant losses, one of the key issues is whether there was fitting and apt valuation and whether the court of law (Sullivan, 2013). Another key issue is whether the merger of both companies will be in sync. This encompasses whether the employees will be comprehensively cognizant of the new system of operation that will be espoused.

Risks

There are a number of risks that encompassed this particular venture. There are numerous aspects that can go wrong with regard to two airlines merging. This is taking into consideration the necessity of uniting together intricate computer systems, policies for the travelers as well as numerous of personnel. If these elements are done wrongly, it can result in pandemonium. One of the major risks in the merger encompasses the adaptation of the system of reservation between the surviving airline and the other small airline. The implication of this is that there is the risk that of a new system of training….....

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