BUS 508 Week 6 Assignment 2
RUNNING HEAD: AMERICAN AIRLINES
American Airlines and US Airway’s Merger
By Aveon Sims
Strayer University
BUS 508 Contemporary Business
Professor Jean Fonkoua
August 24, 2014
Abstract
American Airlines has suffered tremendous profit losses over the last few years. The losses have been so great that the company filed Chapter 11 bankruptcy. The news for the Chapter 11 bankruptcy protection was a shock to many, considering the fact that they had enough money to operate and cover their losses through the following year. The merger indeed was great decision on behalf of American Airlines. The merger itself was questionable. The Department of Justice filed a lawsuit against regarding concerns that it could raise prices for consumers. A settlement was reached and the world largest airline has been formed.
American Airlines has been suffering for many years. The company has suffered more losses than profits. Jobs have been cut; benefits have been scaled back, and the pilots of American Airlines are paid a lot lower salaries than their competitors. Many of them have been furloughed. All of these and many other factors have contributed to American deciding to create the world largest airlines with US Airways. In this essay I will discuss the circumstances that resulted in the merger, assess the significant positive (or negative) effects of the merger, and examine the organizational structure that has resulted from the merger.
American Airlines filed for bankruptcy in November 2011. According to an interview with Richard Quest of CNN, Thomas Horton the new CEO of American Airlines stated that the company was forced into bankruptcy because of the cost disadvantages it faced compared to it’s competitors that had already gone through a bankruptcy. The news came as a shock to many. The company had enough money to sustain the losses that it may incur through the next year. Although the company had the money to operate, the company
American Airlines and US Airway’s Merger
By Aveon Sims
Strayer University
BUS 508 Contemporary Business
Professor Jean Fonkoua
August 24, 2014
Abstract
American Airlines has suffered tremendous profit losses over the last few years. The losses have been so great that the company filed Chapter 11 bankruptcy. The news for the Chapter 11 bankruptcy protection was a shock to many, considering the fact that they had enough money to operate and cover their losses through the following year. The merger indeed was great decision on behalf of American Airlines. The merger itself was questionable. The Department of Justice filed a lawsuit against regarding concerns that it could raise prices for consumers. A settlement was reached and the world largest airline has been formed.
American Airlines has been suffering for many years. The company has suffered more losses than profits. Jobs have been cut; benefits have been scaled back, and the pilots of American Airlines are paid a lot lower salaries than their competitors. Many of them have been furloughed. All of these and many other factors have contributed to American deciding to create the world largest airlines with US Airways. In this essay I will discuss the circumstances that resulted in the merger, assess the significant positive (or negative) effects of the merger, and examine the organizational structure that has resulted from the merger.
American Airlines filed for bankruptcy in November 2011. According to an interview with Richard Quest of CNN, Thomas Horton the new CEO of American Airlines stated that the company was forced into bankruptcy because of the cost disadvantages it faced compared to it’s competitors that had already gone through a bankruptcy. The news came as a shock to many. The company had enough money to sustain the losses that it may incur through the next year. Although the company had the money to operate, the company