Merger, Acquisition, and International Strategies of the United States' Airlines

MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES
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Introduction
The aviation industry, especially in the United States, has lately been faced with dwindling passenger demands, global economic slowdowns, and increasing fuel prices. The airline industry in the country is considered cylindrical and therefore its performance is closely linked to the United States gross domestic product (GDP). As a result of these factors, the industry has seen an uptrend in the number of mergers and acquisitions (M&A). Many airlines have started shifting their focus from competition for market share to maximum profitability. In other words, what was once considered important for individual airline companies efforts to gain a larger market share is no longer the case today. In a bid to cut down on costs and provide viable economies of scale, mergers and acquisitions have become the talk of the US airline industry (Bougette, Hüschelrath, & Müller, 2013).
On their own, individual airline companies cannot cope with rising costs of labor and volatility in fuel prices. Additionally, major airlines are interested to explore profitable international markets that they have never been to. In such cases, mergers and acquisitions become crucial to them. However, not every form of merger and acquisition will work for such a sensitive industry; the US airline industry deserves consolidation as a form of merger and acquisition strategy. Consolidation ensures that both the buyer firm and the bought (or sold) firm integrate smoothly to form a new firm with more effective strategies than both of the pre-merged firms.
In the history of the American airline industry, mergers have occurred since 1930 when one major airline company merged with two other airlines; this occurred when Western Air Express merged with Standard Airlines and Transcontinental Air Transport on 1st of May and 16th of July 1930, respectively. Since then, mergers and acquisitions have been a common as well as suitable element in some cases of airline companies. Despite mergers and acquisitions being a common element, there are still some few airline companies that have never undergone any form of mergers and acquisitions. Such firms are mostly newer entrants into the airline industry and which predominantly serve domestic routes.
Delta Airlines versus JetBlue Airlines
Delta Airlines and JetBlue Airlines are two airline companies that are based in the United States. Delta Airlines is based in Atlanta while JetBlue is based in Delaware. The two firms represent two contrasting scenarios. Delta Airlines is a major network carrier that is ranked third in the US airline industry in terms of passenger capacity and regions covered. Delta operates in major international markets such as most parts of Europe and fewer Asian countries. On the other hand, JetBlue Airlines is a predominantly domestic carrier with a major aim of providing low-cost airfares to its customers.
Delta-Northwest Airlines Merger
Delta Airlines was involved in a major merger and acquisition deal with another major and international US-based airline company known as North West Airlines on 31st of Dec...