Merging American Airlines and US Airways (A)

Name: Merging American Airlines and US Airways (A) (English version)
SKU: 417054

Fubini, David G.; Garvin, David A.; Knoop, Carin-Isabel

Product #:417054

Supplier:Harvard Business School

Discipline:General Management

Setting:United States, 2013

Details:Case (PDF) • 19 pages • 2017-01-06 (Rev: 2017-12-04)

Subjects:

Corporate governance Decision making Organizational culture Teams Business management Decision making and problem solving Collaboration and teams Leadership and managing people Management

Geography:

United States North America

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$11.64

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In February 2013, US Airways announced that it would merge with American Airlines to create the world's largest airline. Doug Parker, the CEO of US Airways, would become CEO of the new American Airlines Group (AAL).The case describes a number of critical decisions Parker made and actions that he took in the course of the acquisition integration process. All focused on how best to combine the two airlines' core systems and operating processes as well as the appropriate scope and speed of strategic changes. Now, Parker must decide on the composition of AAL's senior executive team. Should Parker select a team dominated by US Airways executives with whom he has successfully worked for decades? Or should he establish a new team with roughly equal representation from both airlines? Parker's choice will send important signals to employees about the extent to which the transaction will be viewed as a merger of equals or as a takeover by US Airways.

Learning Objectives

The case introduces students to the stages in the acquisition integration process, the role played by the Integration Management Office, and a number of critical design decisions that must be addressed in the course of combining two large companies. It also sensitizes students to the challenges of cultural differences in the acquisition integration process and the importance of HR and personnel choices.