Integrating Values - The Legality, Morality, and Social Responsibility Research Paper

Integrating Values - The Legality, Morality, and Social Responsibility of US Airways and Delta Airlines Merger - Research Paper Example Mergers became prevalent with the enactment of the Airline Deregulation Act and the trend still persists up-to date. Through anti-trust laws, the U.S. government discourages mergers in the Airline industry with the purpose of protecting consumer interests. This paper examines the legal, social and ethical implications of a proposed merger between Delta Airlines and US Airways. 2. Background 2.1 US Airways The company was started in 1939 and is owned by the U.S. Airways group. It is headquartered in Arizona, and has an extensive fleet network all over the world. Ten years after its formation, the company changed its name to All American Airways and then in 1953, the airline again changed its name to Allegheny Airlines. The airline was later renamed, USAir and in 1979, it acquired Seth San-Diego based Pacific Southwest Airlines. By 1989, the company had become one of the largest carriers in the U.S. and to further extend its influence it announced an alliance with the British Airways i n 19996. In 2000, US Airways started negotiations with the UAL, the parent company of United Airline, but the negotiations never went through. 5 years later, the U.S. Airways merged with the America West holdings, and thereafter entered into code sharing agreements with Qatar Airways, ANA and TACA. In the past one decade, the company has extended its influence in the American skies by signing bilateral agreements with popular airlines. In February 2013, the company started negotiations with the American Airlines, to create one global career. The proposed merger is expected to be complete by the end of 2013. The company competes effectively with other low-cost carriers such as the Southwest, Delta Airlines, JetBlue, and Spirit Airlines. To compete effectively in the stiff market, the company has a huge fleet of modern planes and offers low prices to draw customers and increase load capacity. However, the company has too many planes and so its costs of doing business are unrealistical ly high, leading to looses. At the same time, the company’s hubs are concentrated at the East Coast and as such are able to compete effectively with other competitors. To address this problem, it would be good for the company to expand, to the west and other locations within the U.S. In addition, the airline has been affected by low productivity due to poor employee morale and loss of customers following the September 11th incident and the 2008 global financial crisis. To improve its current poor financial standing, the company should consider abandoning the hub-and-spoke model for the point-to-point system which is likely to attract more customers beside helping the airline to save on costs. Alternatively, the airline should consider forming strategic partnerships with financial stable partners such as FedEx and providing customers with innovative and more personalized services. The biggest threat to the company is the low uptake of the air-related services due to the hard e conomic environment. In addition, the company is likely to be affected by the fare-reduction pricing strategies