American Airlines

The company involved is American Airlines. And American Airlines declares that it has been merged with American Airlines parent company called “ARM” Company. In February 2013, the combination provides much beneficial to American Airlines. It will combine two companies’ advantages together and create really awesome competitors. Meanwhile, it will deliver more value to all their shareholders. Rapid and effective integration will bring important benefits to the combined transaction. But the behavior also generates some problems.

Firstly, the two competitive company merged into one Airline company in short time. It inevitably leads to the reduction of competition. In American, the price of tickets would not rise, but it will not be reduced.

Secondly, in fact, the competition of domestic market has been excessed in American. The Airline Company is hard to endure the sharp competition. In fact, through the suitable recombination that could be reduced the intensity of competition and protect the legal profit of the company. Meanwhile the long-term benefit of travelers. After all, if the Airline company income is too low, it is also harmful to its safety and service.

As a matter of fact, this transaction suffered from the American government American minister of Justice Eric holder said if the transaction successes. American commercial Airline market of 4/5 will be controlled by 4 airline companies, and it will cause some series problems. But the government always take the loose policy to American Airline company merge.

Before the merge, the type of market is perfect, they keep the steady competition. But after the merger, the type of market is monopolistic. The merge of the company brings benefits to the new company. All of this company will also cause damage to the whole system of the company. It is important to know that it will bring a lot of benefits to the company.