Northwest Airlines
Many airlines have faced difficult times after deregulation, and the problems were exacerbated by the downturn in air travel after 9-11. Smaller airlines like Northwest Airlines have had even more problems, and yet Northwest in particular persists and so far has voided going out of business in spite of a series of threats, including poor traveler performance, lowered expectations in business terms, labor problems, and so on.
Before deregulation in the 1970s, many had speculated as to how it would affect the structure of the airline industry, and the prevailing view was that deregulation would lead to a substantial consolidation of the industry, leaving some four to six large systems, each centered around one of the major prederegulation trunks. It was believed, for example, that American Airlines, Delta Airlines, Northwest Airlines, United Airlines, and TWA would be among the survivors because of financial strength or protected international franchises. It was felt that new and larger dominant firms in the industry would be organized around these survivors. Mergers and consolidations were expected to be a major factor, and some did indeed occur (Meyer and Oster, 1981 p. 39).
A report was issued by the Brookings Institution within a few years to see what had happened. The Report also raised the question of the future of commuter airlines under deregulation. Opponents of deregulation had argued that it would lead to severe losses in service to small communities and to a reduction in airline workers' wages. However, the Report found that this had not occurred (Morrison and Winston, 1986, p. 2). Before deregulation, many had speculated as to how it would affect the structure of the airline industry, and the prevailing view was that deregulation would lead to a substantial consolidation of the industry, leaving some four to six large systems, each centered around one of the major prederegulation trunks. It was believed, for example, that American Airlines, Delta Airlines, Northwest Airlines, United Airlines, and TWA would be among the survivors because of financial strength or protected international franchises. It was felt that new and larger dominant firms in...
corporate merger between Delta and Northwest airlines in order to find out the possible reasons why it was necessary. We evaluate the merits associated with corporate mergers and the challenges that might be faced in the process. A recommendation on how mergers should be carried out is also provided Mergers and acquisitions form a very integral part of the contemporary corporate landscape. Kolker (2010) points out that initial six months
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