Posted: August 6th, 2013
Challenges of the United and Continental Airlines Merger
United and Continental Airlines are the largest airlines in America. However, in 2010, the two got into a merger, which has been having major challenges. The merger was under United Continental Holdings, Inc. Some of the rapid changes have inconvenienced employees and clients with complaints of delayed flights and tickets. Upon absorbing Continental Airlines, United Airlines experienced a drop in profits (Freed, 26 July 2012). The company’s CEO Jeff Smisek explained their efforts to rectify the systems problem despite the abrupt changes. The merger was characterized by Continental flights being on the system of United Airlines for ticket pricing management. However, this inconvenienced customer bookings who wanted first class. Agents handling the ticketing system also became frustrated and did not display the required customer service. Customers waited for long hours on the phone for reservations to be clarified.
Companies doing mergers and acquisitions in the future should avoid problems such as those that occurred with the United and Continental Airlines merger. Unlike the latter, they should have well-defined systems of managing exceptions in operations even if they are both in the same market. Operational differences can cause chaos leading to poor business performance. Systems and technology should be managed properly to enhance operational proficiency. Mergers should ensure that operations and systems are managed in a manner that will not compromise customer loyalty (Stahl & Mendenhall, 2005). The client’s interests must be highly regarded for the market to continue enjoying the market share. The merger should also have a transition plan in terms of marketing and sales of products and service. This will ensure that areas in need of change are addressed, and those that stay the same are explored appropriately.
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