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Essay text:
But in doing so, he plans to defy the conventional wisdom of airline mergers and create what some believe would be a dangerous model for the industry's long-term sustainability.
There are two strategies management traditionally deploys in airline mergers-cutting overlapping flights to slash costs or expanding globally to increase revenue. Trimming routes was the approach touted by US Airways in its unsuccessful bid for Delta last year. At the time, US Airways suggested it could save nearly $1 billion by combining the two carriers and lopping 10% off the flight schedule.
In a recent "internal memorandum," Anderson made it clear he was not cutting routes or hubs...
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