Business Case Studies, Mergers, Acquisitions and Takeovers Case Study, US Airways,Delta Air Lines

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Mergers, Acquisitions and Takeovers Case Study

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Case Title:

US Airways Bid for Delta Air Lines: Potential Synergies and Challenges

Publication Year : 2007

Authors: Rudrajit Mishra, Abhijit Sinha

Industry: Transportation

Region:US

Case Code: MAA0121K

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:

On 15th November, 2006 US Airways Group made a surprise bid to buy Delta Air Lines for $8 billion. Once Delta Air Lines was a troubled carrier and emerged from bankruptcy. As a part of their business plan US Airways was known for purchasing the ailing airways.

For instance, it purchased American West in 2005; which was near bankruptcy during the time of acquisition. Analysts perceived that the recent acquisition would help US Airways to consolidate its presence in fiercely competitive US aviation market. They also pointed out that its core competence of acquiring ailing airlines and making them airborne again helped the company to consolidate its presence. It was opined that the combined company would be more effective and profitable competitor in the current fragmented US airlines market.

This case deals with the detail analysis of the deal and the expertise of US Airways to make such deal happen, especially in taking the bankrupt companies. It also unfolds the potential synergies and challenges associated with the deal. The case also discusses the detail about US airlines Industries and the importance of the consolidation in gaining the strategic advantages.

Pedagogical Objectives:

  • To discuss the US aviation market
  • To analyse the bid for acquisition
  • To discuss the probable synergies of the acquisition.

Keywords : Mergers,Acquisitions,Alliances Case Study;US Airways; Delta Airlines; America West; Merger; Acquisition; Synergies; Citibank; Consolidation; Airline market; Strategic advantage; Southwest; JetBlue; Anti-trust; Fare war; LCC (Low Cost Carriers)

Contents : 
Delta Air Lines
Overview of the US Airlines Industry
Top 10 Airlines, ranked by 2005 Domestic Enplanements of US
US Airways/ Delta Combined Domestic Route Map
Cash Flow Statement of Delta Air Lines

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