Mergers And Acquisitions Within The Aviation Sector - Dissertation Example

Using a case study approach, the study recruited human participants with direct managerial experience at Air France-KLM and found that human capital advantages were the primary advantages achieved by this merged firm. Followed in order of priority were revenue growth, improved customer loyalties, the ability to utilize price discrimination strategies and superior competitive power. The findings uncovered no detriments of the merger and concluded that Air France-KLM sought the proper strategic direction when deciding to merge both companies.

A merger encompasses the blending of two different companies that operate under a single umbrella identity. Merged organizations perform trade of their business operations under a singular name and share both profits and potential losses that originate from the newly merged business. It has been recognized that the aviation sector is one of the most fundamental supports of businesses throughout the world (Bell 2010) Approximately half of all global businesses utilize the aviation industry for travel and for transport services.

As a result, companies in this sector put much time and effort into perfecting their business operations by consolidating advantages through processes such as acquisitions and mergers.In most industries, the majority of mergers fail. Porter (1987) offers that most mergers and acquisitions lead to failure as a result of poor performance and inability to establish strategies that productively sustain the new business model formed by the blending of two companies. However, many corporate Board members and top-level executives seek mergers as a means to improve their business.

Mergers are expected to produce synergies and provide greater financial benefits since the consolidation of two different businesses will theoretically improve business efficiencies and enhance competitiveness in an established competitive market.