Continued from 2 Previous Entries
Part I & PartII
Meshing Employees
When two companies merge together there are always difficulties with meshing to two groups of employees. Seniority, benefits, and jealousy create issues. However US Airways and America West have done a better job than most carriers when merging employees from two different companies. Several years ago when American Airlines bought Trans World Airlines, many employees for TWA were put at the bottom of the list in seniority because TWA was no longer a company they were considered less than American Airlines employees. Several years later when American needed to trim their costs nearly all of the laid off employees were former TWA employees. This caused uproars throughout the company as hardly any of the American employees that were lower than the former TWA employees were laid off.
Meshing employees could be the most difficult part. Former Continental Airlines CEO, Gordon Bethune, called off two separate merger deals back in 1994 between their airline and Northwest and Delta after employees were not promised the care they had received with Continental. Employee relations could be the ultimate hang nail when it comes to merging the companies.
As one United employee said on an earlier entry, “The only way a merger of United and Continental could prosper would be to get rid of United top management and insert Continental top management. This would give United employees a much needed boost of moral and some hope that their contribution to the company is valued and appreciated. I should know, I work for United.” This discontent for the management in the ranks at United, although not the opinion of all United employees, shows that there could be troubles if the employee groups were to be meshed and the group integration was done by United management.
Whose Product Would Survive
United has done a lot to improve their customer service within and outside their aircraft. With their ExPlus service, their E+ service in most of their domestic routes, and their P.S. Service from New York to select west coast cities allows for a greater service that keeps frequent fliers coming back and spending money with the airline. Keeping pillows, blankets, and some sort of food service in the cabin is always a positive service to keep higher fare paying, frequent flying passengers on board and paying.
I have noticed a drastic change in customer service on the ground too. With personal welcomes when boarding to that sincere smile at the gate, the customer service has dramatically improved. The vast majority is because of the people who work for the company on the ground. The key to an excellent airline, Customer Service!
Continental is one of the better domestic airlines when it comes to service. They consistently win awards for their business class and even win awards for best North American Airline. Though they do not have any sort of E+ service in their cabins, the layouts could easily be modified for such service. Continental still serves snacks and even has kept other services on the plane; something that other airlines have done away with.
Several people believe that the merger would look like the US Airways and America West merger. This is where US Airways was actually bought by America West replacing the management with their management and just using the US Airways name. “United Airlines would be the surviving entity, at least in name. Larger, broader brand recognition globally, etc. But it might be like US Airways -- the smaller firm's management takes over the reins, but keeps the larger firm's name.”
Though a stand alone two name structure but under one management team, under one large company would be a possibility too. One such company is Air France and KLM. Both airlines are one company but operate under two names.
So Continental’s management would take over but the United name and services would survive; something that could make for a strong airline. Great services, great product, a good management team that treats their employees with respect, and an airline route structure that would give the combined company a competitive edge over any other airline. All very valuable pieces that could make Continental a keystone at United Airlines.
Next Entry: The Combination of United Airlines and Delta Air Lines, A Southern Key?
When two companies merge together there are always difficulties with meshing to two groups of employees. Seniority, benefits, and jealousy create issues. However US Airways and America West have done a better job than most carriers when merging employees from two different companies. Several years ago when American Airlines bought Trans World Airlines, many employees for TWA were put at the bottom of the list in seniority because TWA was no longer a company they were considered less than American Airlines employees. Several years later when American needed to trim their costs nearly all of the laid off employees were former TWA employees. This caused uproars throughout the company as hardly any of the American employees that were lower than the former TWA employees were laid off. 
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