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Week 2 Images Of Change HRM

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Week 2 Images Of Change HRM
CHANGE ANALYSIS- IMAGES OF CHANGE

Major Changes in American Airlines (AA)
The merger between AA and U.S Airways was necessary after chapter 11 of bankruptcy was filed. They had to get bankruptcy protection due to high cost of operation, labor relation problems, high fuel prices and a slowdown in travel demand. The merger was finalized in December 2013.
Prior to the merger, AA struggled with the decision to use chapter 11 to cut cost thinking it could come out of its higher labor cost. However, it finally accepted after pressures from its creditors committee and gave in to restructuring while having bankruptcy protection.
While they were under bankruptcy protection, the restructuring of operations and cost structure was a strategy they adopted.
Impact of Change
The decision AA made to merge with U.S Airways had some positive and negative impact on the organization.
Some of the negative impact of change were the defined benefit pension plan was no longer existed. In addition, there was the need to close down some city based operations, furlough workers, close maintenance stations and ground some aircrafts. Some pilots were also lost due to retirement. However at the end of the day, AA as an organization enjoyed the positive impact of merging with U.S Airways by having a reorganized business and maximized value for all economic stakeholders. The change resulted in a better fuel burn, saved labor cost and savings on repair and maintenance.

Major Changes in United Airlines (UA)
In the few months that followed 9/11 attacks, UA will be faced with economic issues like the decrease in passengers willing to fly and the rising cost of fuel that the economy faced. Maynard (2005) reported that they sprung into action by applying for loan but lost the bid for federal loan package (Para.6). This led to a strategic decision in 2002 to file for chapter 11 of bankruptcy of which a merger and acquisition will be the get-out ticket. At the time of its bankruptcy, the airline



References: American Airline Files For Bankruptcy. Reuters. Retrieved from http://www.reuters.com/article/2011/11/30/us-americanairlines-idUSTRE7AS0T220111130 Association of Professional Flight Attendants, (2). Unions Representing 60,000 Airline Employees Unite in Their Strong Support of Merger between American Airlines and US Airways. Business Wire (English). Community Employee Connection. AA.com. Retrieved from http://www.aa.com/i18n/aboutUs/corporateResponsibility/community/progress.jsp Palmer, I., Dunmore, R., Akin, G., (2009). Managing Organizational Change: A Multiple Perspective Approach. New York , NY: McGraw-Hill Sprayregen, J. M., Kieselstein, M., & Seligman, D. R. (2006). Undoing Chapter 11: Learning from the United Airlines Deal. (cover story). Financial Executive, 22(5), 24-27. United Airlines 2004: Pulling Out Of Bankruptcy. Academia. Retrieved from http://www.academia.edu/4354216/Restructuring_United_Airlines United Airline Wins Right To Default On Its Employee Pension Plans. New York Times. Retrieved from http://www.nytimes.com/2005/05/11/business/11air.html?pagewanted=all&_r=0 United Airlines Continental Branding. Forbes. Retrieved from http://www.forbes.com/2010/05/24/united-airlines-continental-branding-cmo-network-allen-adamson.html

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