StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Iberia : British Airways - Essay Example

Cite this document
Summary
Name of author: Iberia – British Airways Merger and acquisition (M & A) is one of the major business strategy adopted by prominent organizations in order to increase their competitive power in the current globalized business environment. Globalization has opened many opportunities to business groups and it is easy to do cross cultural or international business at present…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER98.1% of users find it useful
Iberia : British Airways
Read Text Preview

Extract of sample "Iberia : British Airways"

Download file to see previous pages

Competition is getting stiff as a result of the growth of international business and it is difficult for small or medium organizations to survive long. Realization of above fact forced such organizations to agree with merger or acquisition deals offered by big organizations. British Airways and the Spanish airliner, Iberia recently signed a merger agreement. This paper analyses the above merger deal in detail. British Airways is the UK airliner headquartered at London. It was established in 1974.

It was started under public sector initially and privatized in 1987. Both Boeing and Airbus aircrafts are used by British Airways for transporting passengers. “In 2002, 38 millions of passengers traveled with British Airways with its fleet of 237 aircraft and it seems that even more will have the pleasant of travelling with the world's favorite airline” (British Airways Information). On the other hand, Iberia is the Spanish airliner based in Madrid, Spain. “Iberia was founded in 1927. Its first name as Lineas Aeras de Espanan” (Iberian Airlines).

In 1944 it was came under the direct control of the Spanish government. However, it was again privatized in 2001. Mergers and acquisitions always result in mutual growth and benefits to both the offeror and the offeree. Berry (2009) has pointed out that “Increased market share, lower cost of production, higher competitiveness, acquired research and development, knowhow and patents, financial leverage, improved profitability etc” as some of the advantages M & A (Berry, 2009). Gaughan, (2001) has pointed out that the combined power of the merged organizations would be more than that of the individual firms.

In his opinion, the combination of two firms will yield a more valuable entity than the value of the sum totals of the individual entities. In other words, Value (A + B) > Value (A) + Value (B) according to Gaughan (Gaughan, 2001, p.5). In mathematics 1+1 =2, but in business 1+1 is more than 2. The major objectives of merger and acquisition are to increase the competitive power. Airline industry is facing stiff competition at present because of the introduction of globalization. Emirates Airlines, Lufthansa, Air France, Air India, Singapore Airlines, Malaysian Airlines, Gulf Air etc like big airliners are causing big challenges to the business prospects of British Airways and Iberia which forced them to engage in a merger deal.

When two airliners compete in a market, they are knowingly or unknowingly destroying some of the opportunities of the other. If they merge together, the destructive elements will be completely disappeared and the constructive elements will be increased which will increase the competitive power very much. “Cross border strategic alliances (CBSA) were motivated by the desire to speed entry into new markets, to develop and commercialize new products, to gain skills or to share costs” (Sudarsanam, 2003, p.232). Sharma (2001) also expressed similar opinion; “Accelerate product development,??Spread risk/share resources, ?

Access to new markets, Expand customer base, Increased market presence, ?Provide added value to customers, ?Access knowledge and expertise outside of your company, Strengthen reputation

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Iberia : British Airways Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/environmental-studies/1418426-iberia-yt-british-airways
(Iberia : British Airways Essay Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.org/environmental-studies/1418426-iberia-yt-british-airways.
“Iberia : British Airways Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/environmental-studies/1418426-iberia-yt-british-airways.
  • Cited: 0 times

CHECK THESE SAMPLES OF Iberia : British Airways

Role of Aviation Sector in the Tourism Industry

The aviation sector plays a key role in the tourism industry.... In the light of low cost carriers they have opened up many new tourist destinations.... Using examples and tourism statistics discuss and analyse how airline carrier contribute to the success or failure of tourist destinations.... hellip; Further to that, examine the importance of discovering route / new destinations for airlines....
5 Pages (1250 words) Essay

The Financial Crisis on the British Airways Company

The Impact of the Financial Crisis on the british airways Company Name Macro & Micro economics December 2, 2012 Contents Contents 2 1.... Impacts of Financial Crisis on british airways Company 3 2.... “Ryanair and EasyJet continue strong growth, british airways' struggles continue in Sep-2009.... Profit downturn 7 Following the decline in travels and cargo flow, british airways revenues dropped substantially, which was associated with the high reliant on the premium tickets....
7 Pages (1750 words) Research Paper

Strategic management, British Airways

british airways (BA) is one of Europe's largest airline carriers, operating in a difficult environment in terms of securing higher profit and with rising competition, such as Ryanair, which are offering more discounted fares in an effort to outperform larger airline carriers.... hellip; dditionally, british airways maintains a cargo carrying business which provides considerable revenue to the company's portfolio and profit expectations.... This report takes an in-depth view of the market environment in which british airways must operate as well as a strategic analysis about how the company has positioned itself for strategic success....
12 Pages (3000 words) Essay

British airways and Iberia airlines merger

Brief History of british airways (BA) british airways (BA), the flag carrier of the UK, is the largest airline in the United Kingdom on the basis of fleet magnitude flights and terminus.... The privatization lasted up to 2009 after which the airline formed a merger with british airways in 2010, which gave birth to International Airlines Group....
4 Pages (1000 words) Essay

Business Formation and Purpose of British Airways

The author describes and analyzes british airways company, the flag carrier airline service of the United Kingdom which is the largest one in the UK airline industry in terms of international destinations and fleet size.... The UK government established the british airways Board in 1972 to manage the operations of its two nationalized airline corporations; British Overseas Airways Corporation and British European Airways along with two regional airlines, Cambrian Airways, and Northeast Airlines (Britishairways....
4 Pages (1000 words) Case Study

Corporate Finance Environment

The implications and reasons for this increase in mergers and acquisitions will then be discussed keeping in mind two important examples; the acquisition of Cadbury by Kraft and the merger of british airways and Iberia of Spain.... This essay "Corporate Finance Environment" provides a brief overview of mergers and acquisitions, outlining the major characteristics of these activities....
10 Pages (2500 words) Essay

Management Accounting: British Airways

The paper "british airways" discusses how management accounting can supply information to assist the management of british airways, particularly the key techniques that are favorable to the company, main managing accounting techniques, and methods, analysis of the strengths and weaknesses.... As history traces its origins back, BA was formed with the emergence of BOAC, BEA, Cambrian Airways, and Northeast Airlines last 1974 (“british airways,” n....
6 Pages (1500 words) Coursework

The Power of Airline

The paper entitled 'The Power of Airline' presents Airline that carriers have a key role in the development of tourism worldwide; their contribution to the development of destinations is related primarily to the increase of profits of local businesses.... hellip; The development of a place as a cultural destination could be also achieved through the airline carriers – without which the visiting of the above place would be extremely difficult....
5 Pages (1250 words) Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us