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Essay / Research Paper Abstract
A 6 page paper discussing the benefits and detriments of British Airways' merger with the US-based airline in 1992.. At a time when the entire industry was losing unprecedented sums of money, BA was able to remain profitable, though only barely so. USAir was losing less than its US-based counterparts, and the two of them together had a chance to pull themselves out of their financial slump. Other US-based carriers and even the national airlines of several European countries opposed the idea, however, believing that increased competition would deepen their already-serious deficits. Bibliography lists 3 sources.
Page Count:
6 pages (~225 words per page)
File: D0_USAir.doc
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Unformatted sample text from the term paper:
global. As carriers around the world mount new battles for international market share, they are forming alliances with other airlines and pooling resources. Before most of the new
partnerships can get off the ground, though, they must navigate the thicket of trade restrictions that still restrain international airline traffic" (38). The problem faced by British Airways in
1992 in their consideration of acquiring nearly half interest (44 percent, the highest percentage allowed by law) in USAir was in whether their entrance to new markets would be worth
the concessions they surely would be forced to make for other US airlines wishing to serve London. The markets that would be opened to them by their merger with
USAir, one of the largest airlines in the US serving many of the cities into which BA would like to fly, could prove to be a boon to the airline.
At a time when US airlines and indeed the global industry was losing money in record levels, BA was still profitable. The airline quite naturally believed that expansion
into several US cities would only serve to bolster that thin line of profitability. The problem for BA was that the "big three"
US airlines were demanding landing rights in Londons Heathrow airport in exchange for BA being allowed to enter into new markets, with the anticipated result that BAs competition in the
global market would increase to the point that it would negatively affect BAs profitability (Williams 3). British Airways held intense interest in gaining access to American markets, but the
airline was far less eager to accede to other airlines demands for a reciprocal agreement. Possible solutions to the dilemma included yielding to
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