Saturday, April 7, 2012

Current News on United-Continental Merge and American Bankruptcy


This blog acts as an update in correlation with the blog posted on February 3rd entitled Mergers: The Mergered and the Merging. In the past two months there have been additions to the progress of the current merger United Continental Holdings, Inc. and the American Airlines bankruptcy.  Therefore please reference the previous blog if there are any ambiguous statements.

As discussed in the previous blog United Airlines and Continental Air Lines will become one single operation as United Continental Holdings.  The companies announced their merge in May 2010 and are in the process of receiving one single operating certificate from the FAA.  They have taken steps to merge the two separate airlines. In February there were reports the new paint scheme is on the ramps as well as the 100% code sharing of all flights.  Sadly Continental officially ended all complimentary snacks and meals in economy on domestic routes.

In March the computer systems were integrated to become one, maintaining a more previous continental approach for the management team and reservation system sectors. Critics show they are pleased from the consumer standpoint of the new reservation system, frequent flyers upgrades and prioritization system as well as the launch of the new website (United.com) which is very user friendly.  All continental sigs are in the process of being removed from the airports and the Continental flights have been recoded to United flights. March 3rd marked the launch of a common boarding pass across all flights to eliminate confusion between Continental United and United Express customers.

In the past two months the company has also added some additional routes, new planes are being bought as the cabins are modernized with wireless Internet access.
 Although the companies seem to be expanding as one the Huffington Post published an interesting article about the merger highlighted some bumps in the road with quite colorful language. The article was entitled “United We Fall” The Merger Between Continental and United Off To A Shaky Start” The article stresses some concerns with United CEO, Jeff Smisek, and the choices he has made.  The article discusses the customer service flaws of Untied and the public opinion of Continental in the past two years which had a significant drop. In my previous blog I mentioned Smisek’s words of encouragement about the merge being a perfect marriage but the article goes about bashing Smiseks decisions with a comment of him driving the company to the ground. Although I feel this is a bit harsh we will wait and see what the future holds for this merger. Will they end up like Pinnacle declaring bankruptcy while in the middle of merging three different former companies?


Repercussions of American Airlines declaration of Bankruptcy

The CEO of AMR Corp, which operates American Airlines, announced in March that American is open to merging with another airline but not at this moment as they are undergoing bankruptcy restructuring.  American was granted a 6-month extension under this restructuring agreement. The Chicago Tribune posted an article about their plan to grow and not shrink as their restructuring plan projected to save the company $1.25 billion will only 13,000 job cuts. Later in the article the flight attendant who recently lost their composure was discussed also. The airlines are treating it as a medical issue, but the reality of the possibility of being unemployed could have put some undue stress on the situation previous to freak out. To read more please visit the Chicago Tribune website. In the last few weeks the influence and talk of US Airways merging with American has taken a whole new light as Americans discusses dropping labor contracts. US Airways has launched a new proposal trying to gain Americans interest in the battle to stay afloat through the bankruptcy. 

3 comments:

  1. It's interesting that there was an announcement back in February of a new paint scheme, didn't hear about that. Much of the aviation community just despises the United-Continental hybrid scheme. Personally, upon it's inauguration, I thought it was one of the worst paint schemes I’ve ever seen, though over time it's grown on me. I wish they stuck with the newest United scheme (blue/white), though. Nonetheless, it'll be interesting to see what the new paint scheme will be.

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  2. This merger seem to have a messy outlook. After merging the airlines, they merge the paint schemes, want to merge the computer systems, and would like to bring another airlines in the mix. They need to slow down a little. I can understand merging the paint scheme, it shows unity, but the computer systems, meaning it will be a lot of overwrites and debate on how the system can work better and how to incorporate every little detail, which will take a lot of time going through every department and every detail. Lastly bringing another addition into this, now they would have to incorporate their sense. This is quite interesting.

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  3. The current paint scheme for United/Continental I believe is uncreative and ugly, it'll be interesting to see what the new scheme will look like. Everything I have read and everyone I have talked too all have agreed American has to do something in order to survive, but all have also agreed that merging with U.S. Airways will be a disaster.

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