Sunday, 9 December 2012
Croatia Holiday - Airline Consolidation
With a swag of unions involved and staff carrying the ubiquitous baggage it will be difficult in the short term to turn mergers like this into finely tuned machines of profitability. The trick will be to make sure the merging cultures assimilate and work as one unit. It won't be the last as airlines seek new partners to re energise their share price or look for greater market share. The news that United Airlines and Continental have merged is the latest in a long line of consolidation to happen in the airline industry.
A piece of string comes to mind as the market will decide in the end if the process is worth the wait. So how long have they got?
"Flying by the seat of our pants", as American Denim, think of the marketing opportunities they could link up with Levis. I don't know why American Airlines doesn't merge with Denim Air. Years ago there was talk of 6 major global airlines but this has not come close to fruition as the proliferation of low cost carriers continues while the legacy carriers look for new partners to sustain their longevity.
As supplier to Malaysian LACSA, or the tastier compilation of Malaysian Airlines merging with LACSA working with the local coconut milk producer splashed across their planes.
The fallout can be disastrous if knowledge and intellectual property is lost via management reshuffles and employee cost cutting. Guided by proper communications outlining a clear direction, all three are difficult without employee engagement. Do they adopt the culture of the other team or try and bring in a fresh approach, do they bring old culture with them. The cultural direction will come from this new team and they need to decide on how this decision will play out in the short term and the long term. Companies must decide how to divide up the management team and this can be the most serious decision as it filters down to all others engaged in the merger, aside from deciding on the best branding for the merger.
It's not like there is an airline bar they all frequent to chat over martinis and gaze longingly at each other's profit and loss statements? British Airways is a good candidate as an airline in flux needing a serious partner to bring stability and profitability but how do they find each other?
) each party brings to the table is the ultimate requirement to get it done. A great marriage broker who understands the baggage (get it airlines? Everyone is working for one side against the other so that there is an advantage to be held. Is difficult to find nowadays, a third party consulting team who have the best intentions of both parties at heart.
British Virgin has a ring about it. Or what about a merge with the competition? Especially when it came to negotiations over morning tea and those special cookies with the Rastafarian ingredients, i'm thinking Jamaican Airways would give them a more laid back approach. So to speak, right now Willie Walsh would likely accept overtures from any party as long as they had hair and teeth.
I'm sure it's crossed Richard's mind.
Time has to be running out.
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