American Airlines, Comair and Delta - Benchmarking Mergers & Acquisitions

Benchmarking –Mergers & Acquisitions

Companies and organizations are challenged with daily decisions that can provide unlimited opportunities internally and externally. Finances and growth maximization also play a large role in these decisions. Executives and managers must make decisions on how resources will be appropriated, how to increase profits, sales, and the companies overall business portfolio. Companies are able to determine what is working and not working by analyzing the company's financial statements. At times the financial statements will tell a lot about an organization and their financial situation or background. When companies begin to lose out on profits or sales, they are at a point in time where they could be potentially bought out or go out of business. The current benchmarking paper Team C is focusing on is mergers and acquisitions that other organizations in diverse industries have faced. With LEI and Shang-wa potentially facing buyouts, we wanted to view organizations that have merged or partnered in order to keep the business flowing. Next, Team C will explore several companies that have dealt with mergers or acquisitions.

Airlines

The first mergers and acquisitions we will discuss include American Airlines, Comair, and Delta.

American Airlines was flown into existence in 1929 when the Aviation Corporation was formed to acquire younger companies, and in 1930 the Aviation Corporation's were incorporated into American Airways. In 1934 American Airways became American Airlines, Inc. (American, 2002). In 1937 American hit a milestone with carrying its one-millionth passenger. Through out the years American had its own milestones and changes with new routes being added, different planes, and even reorganization within the company. In 1982, stockholders approved a plan of reorganization and formed a new holding company AMR Corporation, which became the parent company of American Airlines, Inc. With American doing well in the industry and the consumer base was increasing, they decided to search out smaller airlines and see if they could boost their business. In 1998 American Airlines announced its acquisition of Reno Air, and American Eagles acquisition of Business Express. By August 1999 Reno Air was fully integrated. However, American was not done with increasing their business and clientele. On September 21, 1998, American and four other airlines joined alliances to start a customer driven global alliance called one world, which launched a multi-million dollar program that raised the standard of global travel. Acquisitions and mergers are also good for companies who are headed for bankruptcy yet still want to salvage some of the company's assets. In April 2001, TWA or Trans World Airlines assets were acquired by American Airlines. Another airline company that was actually acquired