The challenges of airline mergers

Corporate mergers can be complex affairs even when the businesses involved are small in scale. Different firms have different internal practices, and harmonising these can be uncomfortable for workers and consumers alike. Different pay and conditions for the two workforces will take time to streamline. Technical systems can be incompatible, requiring wholesale changes in how data and information are generated, stored and accessed. And beyond these tangible aspects, the cultural aspects of bringing together two different groups of people who may have different values and priorities are seldom easy to overcome. The stakes become greater still when the entities involved are subject to heavy regulation.

Aviation mergers take these challenges to a whole new scale, as this profile piece by Bloomberg Businessweek demonstrates. United and Continental Airlines announced their merger back in 2010. And the process of bringing together the two behemoths of America’s skies is still far from complete. The airlines still essentially operate as two separate divisions. Much progress has been made: there is now one flight control system for both the legacy United and Continental fleets. And by March, it is expected that customers will finally be processed through a single passenger management system. Those flying with the airline will surely be hoping that the March switch-over goes as smoothly as last year’s flight control merger.

It hasn’t always been this easy. The first evidence of the merger for passengers came when the merged entity (also called United) picked one brand of coffee for its two airlines. After an exhaustive, bureaucratic decision-making process over several months — involving various layers of management — the near-universally agreed choice ended up proving a disaster, when passengers served coffee on legacy United’s fleet found their caffeinated brew was watery. Why? Because the equipment on the old United planes differed from those on the old Continental planes. Oops.