In February 2013, U.S. Airways announced that it would merge with American Airlines to create the world’s largest airline. During the acquisition, then-CEO Doug Parker and his board had transformative decisions to make.
Today, we bring you a conversation that breaks down the strategy for US Airways’ merger with American Airlines with Harvard Business School senior lecturer David Fubini.In this episode, you’ll learn how Parker approached each of these strategic decisions – especially in areas like culture and operations, where American and US Airways had huge differences.
BRIAN KENNY: Maybe you can start just by telling us what would your cold call be to start this case in the classroom? BRIAN KENNY: And you saw how many of these when you were working at McKinsey? You probably don’t have the exact number, but a lot, I’m going to guess. BRIAN KENNY: How often does it happen in the reverse order, I guess, with the little fish gobbling the big fish?
BRIAN KENNY: But that sets up an interesting dynamic because the case does a good job of talking about the differences and the personalities of the two companies, right? So American Airlines is the antithesis of what you just described. BRIAN KENNY: So, in your experience, how complicated is it to sustain a business while you’re going through a merger like this? How do you continue to operate as if things are normal? We always use that expression of fixing the plane while it’s in flight. I guess it’s apropos here.
BRIAN KENNY: Yeah. But it’s obviously positioned as a merger, so they are looking at co-leadership. What are some of the pros and cons of doing that? And how do you make it work, I guess? BRIAN KENNY: Yeah. And does this start to get into some of the things that you would tell a leader that they need to hear, but probably aren’t told?
BRIAN KENNY: I didn’t get a vote. I was going to say, so many of the things that he did, I would think would make him a hero with the rank-and-file people, probably with the unions as well. But I would imagine it would cause a lot of strain on the relationship with the management folks at American Airlines. Is that something that you have to address head-on? How do you tackle that?