In recent news two major airline companies have just been granted approval by a judge to successfully merge. American Airlines and US Airways are now operating under the same wing as one company. As seen through previous mergers such as United and Continental airlines last year the merging of airlines can be a bumpy road. Nevertheless, the merger of American Airlines and US airways will see success as they have officially created the worlds largest airline with estimated revenues reaching about $38 billion. The areas that this “New American” company will see its advancements besides its increase in revenues are as follows. The merged company will now have an increased overall market segment taking both companies target market and combining them into one. The airlines will benefit because due to the merger it eliminates the risk that comes from reaching out to new target markets. In terms of the service that these airlines offer this merger extends the life of US Airways because their planes were getting older and out of date where as American Airlines planes have just been refurbished. There is a downside for some customers because of this merger. US Airways now leaves Star Alliance to join OneWorld, therefore all customers who fly on the Star Alliance program will no longer be able to fly on US airways using their frequent flyer miles. However, on the other side of things if you are a member of OneWorld you now have US Airways as an option. Lastly, this merger will have great benefits for the companies brand images. Their brand images will now have the chance to be represented to many new customers in many different countries across the world. This merger is a decision that will reap great benefits for its customers, its shareholders, and its employees and acts as a great step in creating a “New American” way to travel.
American cleared to merge with US Airways