A Comparative Study of Mergers and Acquisitions Within the Eu Aviation Sector: a Case Study of British Airways and Iberia.
A Comparative Study of Mergers and Acquisitions within the EU Aviation Sector: A Case study of British Airways and Iberia.
Key words: Mergers and Acquisitions, Aviation Sector, EU, Network Carriers, Strategies.
Aims of Research:
The Aim of this research is to address the following issues:
1) What are the main motives for engaging in Merger and Acquisition activity for Aviation Market? Did they reach their goals?
2) What are the consequences of Airlines Company’s merger and acquisition? How did this activity affect the companies?’
Section 1: Background:
Mergers and Acquisitions (M&A) in aviation markets are quiet a hot topic in the industry, most recently as a result of increasing cost pressures and market share. Many argue that M&A is the perfect tool to survive in the rapidly changing world of globalization, as it allows growth, to gain access to new markets, to cut costs and to leverage risk. The European Commission, for example, argues that creating a full “Open Aviation Area” might generate up to 80,000 new jobs. The successful mergers of the recent past such as Lufthansa/Swiss, and the just agreed merger of BA and Iberia is the beginning of a new wave of mergers in the aviation sector. However, many others point to the pitfalls that are often associated with M&A deals, particularly in aviation. The aviation industry is a unique sector in the economy. This industry is also an unstable and unpredictable business (Airlines Merger and Acquisition, 2011).
As stated by Dunning (1988) as well as Krugman (1987) international merger and acquisition, provides access to novel market in terms of sales volume and profit sharing (Datta and Puia. 1995). Merger also helps the acquiring companies to overcome the existing competition and certain investment fences (Gregoriou and Renneboog 2007).Companies can exploit wider range of resources and wider range of business opportunities. (Datta and Puia. 1995)
There is sufficient need to
Key words: Mergers and Acquisitions, Aviation Sector, EU, Network Carriers, Strategies.
Aims of Research:
The Aim of this research is to address the following issues:
1) What are the main motives for engaging in Merger and Acquisition activity for Aviation Market? Did they reach their goals?
2) What are the consequences of Airlines Company’s merger and acquisition? How did this activity affect the companies?’
Section 1: Background:
Mergers and Acquisitions (M&A) in aviation markets are quiet a hot topic in the industry, most recently as a result of increasing cost pressures and market share. Many argue that M&A is the perfect tool to survive in the rapidly changing world of globalization, as it allows growth, to gain access to new markets, to cut costs and to leverage risk. The European Commission, for example, argues that creating a full “Open Aviation Area” might generate up to 80,000 new jobs. The successful mergers of the recent past such as Lufthansa/Swiss, and the just agreed merger of BA and Iberia is the beginning of a new wave of mergers in the aviation sector. However, many others point to the pitfalls that are often associated with M&A deals, particularly in aviation. The aviation industry is a unique sector in the economy. This industry is also an unstable and unpredictable business (Airlines Merger and Acquisition, 2011).
As stated by Dunning (1988) as well as Krugman (1987) international merger and acquisition, provides access to novel market in terms of sales volume and profit sharing (Datta and Puia. 1995). Merger also helps the acquiring companies to overcome the existing competition and certain investment fences (Gregoriou and Renneboog 2007).Companies can exploit wider range of resources and wider range of business opportunities. (Datta and Puia. 1995)
There is sufficient need to