Mergers and acquisitions : the case of Delta Airlines and US Airways
Autor(a) principal: | |
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Data de Publicação: | 2013 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/16776 |
Resumo: | Over the last decade, US passenger airline industry faced an extremely adverse period when it comes to profit generation, culminating in significant losses and bankruptcies of several carriers. Within this market, airlines operate under a very demanding and stressful environment. Three main factors are reflective of this specific setting, such as: the existence of unpredictable fuel costs (being the major burden to these firms), the increasing competition forces mainly coming from low-cost carriers and a very economic-sensible air travel demand faced by carriers. Taking into account those industry-specific features, airlines found M&A a strategic tool to increase their profitability by sharing and pooling resources. Ultimately, most recent mega-mergers within this sector are performed aiming at the reduction of capacity in order to strengthen efficiency levels, so the companies can properly weather economic adverse conditions. In this paper, a proposed merger of equals between Delta Airlines and US Airways is analyzed in order to attest a further step on US airline industry consolidation. Simultaneously, the thesis is expected to fill the blanks about how much value would be yielded by combining these carriers not only from a macro perspective, but also assessing how much value would be captured by each party. The paper found that the deal would be supported by the generation of cost synergies due to the fact that both companies have a considerable portion of overlapped business operations, specially reflected on identical routes. Indeed, the final results of the report show that after the combination of both firms – including the net effect of synergies -, the value would be 22.6% higher than the enterprise value of the simple combination of each firm based on their standalone valuations. Despite of such positive outcome, this paper took into account the role of antitrust authorities on the process, which can influence the final result of the deal, due to the fact that, after the proposed deal, the combined firm would get a considerable stake of the market, posing questions at the competitive level. |
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Mergers and acquisitions : the case of Delta Airlines and US AirwaysDomínio/Área Científica::Ciências Sociais::Economia e GestãoOver the last decade, US passenger airline industry faced an extremely adverse period when it comes to profit generation, culminating in significant losses and bankruptcies of several carriers. Within this market, airlines operate under a very demanding and stressful environment. Three main factors are reflective of this specific setting, such as: the existence of unpredictable fuel costs (being the major burden to these firms), the increasing competition forces mainly coming from low-cost carriers and a very economic-sensible air travel demand faced by carriers. Taking into account those industry-specific features, airlines found M&A a strategic tool to increase their profitability by sharing and pooling resources. Ultimately, most recent mega-mergers within this sector are performed aiming at the reduction of capacity in order to strengthen efficiency levels, so the companies can properly weather economic adverse conditions. In this paper, a proposed merger of equals between Delta Airlines and US Airways is analyzed in order to attest a further step on US airline industry consolidation. Simultaneously, the thesis is expected to fill the blanks about how much value would be yielded by combining these carriers not only from a macro perspective, but also assessing how much value would be captured by each party. The paper found that the deal would be supported by the generation of cost synergies due to the fact that both companies have a considerable portion of overlapped business operations, specially reflected on identical routes. Indeed, the final results of the report show that after the combination of both firms – including the net effect of synergies -, the value would be 22.6% higher than the enterprise value of the simple combination of each firm based on their standalone valuations. Despite of such positive outcome, this paper took into account the role of antitrust authorities on the process, which can influence the final result of the deal, due to the fact that, after the proposed deal, the combined firm would get a considerable stake of the market, posing questions at the competitive level.Tsvetkov, PeterVeritati - Repositório Institucional da Universidade Católica PortuguesaMancelos, Francisco Maria Cohen Braamcamp de2016-11-08T01:30:11Z2013-11-0820132013-11-08T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10400.14/16776TID:201181436enginfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-10-03T01:40:02Zoai:repositorio.ucp.pt:10400.14/16776Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T18:13:58.165440Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Mergers and acquisitions : the case of Delta Airlines and US Airways |
title |
Mergers and acquisitions : the case of Delta Airlines and US Airways |
spellingShingle |
Mergers and acquisitions : the case of Delta Airlines and US Airways Mancelos, Francisco Maria Cohen Braamcamp de Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
title_short |
Mergers and acquisitions : the case of Delta Airlines and US Airways |
title_full |
Mergers and acquisitions : the case of Delta Airlines and US Airways |
title_fullStr |
Mergers and acquisitions : the case of Delta Airlines and US Airways |
title_full_unstemmed |
Mergers and acquisitions : the case of Delta Airlines and US Airways |
title_sort |
Mergers and acquisitions : the case of Delta Airlines and US Airways |
author |
Mancelos, Francisco Maria Cohen Braamcamp de |
author_facet |
Mancelos, Francisco Maria Cohen Braamcamp de |
author_role |
author |
dc.contributor.none.fl_str_mv |
Tsvetkov, Peter Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Mancelos, Francisco Maria Cohen Braamcamp de |
dc.subject.por.fl_str_mv |
Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
topic |
Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
description |
Over the last decade, US passenger airline industry faced an extremely adverse period when it comes to profit generation, culminating in significant losses and bankruptcies of several carriers. Within this market, airlines operate under a very demanding and stressful environment. Three main factors are reflective of this specific setting, such as: the existence of unpredictable fuel costs (being the major burden to these firms), the increasing competition forces mainly coming from low-cost carriers and a very economic-sensible air travel demand faced by carriers. Taking into account those industry-specific features, airlines found M&A a strategic tool to increase their profitability by sharing and pooling resources. Ultimately, most recent mega-mergers within this sector are performed aiming at the reduction of capacity in order to strengthen efficiency levels, so the companies can properly weather economic adverse conditions. In this paper, a proposed merger of equals between Delta Airlines and US Airways is analyzed in order to attest a further step on US airline industry consolidation. Simultaneously, the thesis is expected to fill the blanks about how much value would be yielded by combining these carriers not only from a macro perspective, but also assessing how much value would be captured by each party. The paper found that the deal would be supported by the generation of cost synergies due to the fact that both companies have a considerable portion of overlapped business operations, specially reflected on identical routes. Indeed, the final results of the report show that after the combination of both firms – including the net effect of synergies -, the value would be 22.6% higher than the enterprise value of the simple combination of each firm based on their standalone valuations. Despite of such positive outcome, this paper took into account the role of antitrust authorities on the process, which can influence the final result of the deal, due to the fact that, after the proposed deal, the combined firm would get a considerable stake of the market, posing questions at the competitive level. |
publishDate |
2013 |
dc.date.none.fl_str_mv |
2013-11-08 2013 2013-11-08T00:00:00Z 2016-11-08T01:30:11Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/masterThesis |
format |
masterThesis |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.14/16776 TID:201181436 |
url |
http://hdl.handle.net/10400.14/16776 |
identifier_str_mv |
TID:201181436 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
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info:eu-repo/semantics/openAccess |
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openAccess |
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application/pdf |
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reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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RCAAP |
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RCAAP |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799131817988587520 |