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Holding Co. One Vs Multiple Brands.  
User currently onlineWROORD From United States of America, joined Mar 2009, 942 posts, RR: 0
Posted (3 years 9 months 1 week 1 day 14 hours ago) and read 2558 times:

I wonder why United Continental which formed United Continental Holding Co. does not maintain separate brands like AF and KLM? It is one holding company but continues operating as two brands. I know that there are national interests at stake and probably otherwise the governments would not agree to a merger. With UA and CO operating as two brand entities would probably retain more customers. Another one is SW and FL with FL having business class it would allow SW to serve more premium business markets and leave SW brand to leisure destinations.

8 replies: All unread, jump to last
 
User currently onlinekanban From United States of America, joined Jan 2008, 3356 posts, RR: 26
Reply 1, posted (3 years 9 months 1 week 1 day 14 hours ago) and read 2529 times:
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I trust you meant Southwest (WN) not air Namibia (SW)...

anyway their directors probably feel that it doesn't matter, people are fickle, or why merge if you can't wipe out the losers name..


User currently offlineKGRB From United States of America, joined Sep 2010, 698 posts, RR: 1
Reply 2, posted (3 years 9 months 1 week 1 day 14 hours ago) and read 2495 times:

Why merge, if you can't achieve any of the synergies that come from combining operations? If they were operated separately, there would be little reason to merge at all.

If AF could've taken over KLM and merged the two operations, I'm sure they would. And, as you mentioned, there is no national identity attached to 'Continental' or 'AirTran', anyways.



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User currently offlineMNMncrcnwjr From United States of America, joined Jul 2010, 308 posts, RR: 0
Reply 3, posted (3 years 9 months 1 week 19 hours ago) and read 2280 times:

There are plenty of reasons for Multiple Brands by one company in the same industry
- Ford Motors : Ford - Lincoln
- Government Motors - Chevy- Cadillac - GMC - Buick
- Mercury Marine : Mercury, Force, Mariner

It is to take smaller slices of the overall pie rather than one large slice which is harder to manage ..

In the US domestic Airline Market one only has to look and wonder about Republic Airways subsidiary's and go to market strategy ... http://republic-airways.com/subsidiaries.html



CV340/580DC3DC9super80MD88/90DC10717273747576777A319/20CRJ2/7/9F27AVROJET31CITAT5/7/XSAAB340YS11Dash8E135/45/75
User currently offlineViscount724 From Switzerland, joined Oct 2006, 24629 posts, RR: 22
Reply 4, posted (3 years 9 months 1 week 19 hours ago) and read 2263 times:

Quoting KGRB (Reply 2):
If AF could've taken over KLM and merged the two operations, I'm sure they would.

They're still saving hundreds of millions from merger-related synergies.


User currently offlinemogandoCI From , joined Dec 1969, posts, RR:
Reply 5, posted (3 years 9 months 1 week 19 hours ago) and read 2238 times:

A multiple brand is only meaningful if it offer product differentiation - hence the reason why so many minor brands within GM/Ford/Chrysler were dying - they're all offering the same car under a different logo, which does nothing except confusing the consumer and increase structural costs (dealerships)

Cathay and Dragonair makes sense to remain separate brands cuz clearly the service level is different - one is a renowned global carrier with true First class, another is a regional carrier, mostly for tourists, to somewhat second-tier destinations (except their Shanghai shuttle)

UA/CO makes no sense to remain 2 brands since they're offering similar products.

AF/KL is constrained purely by national pride. It'll totally suck for the only airline based in Amsterdam to be called "AirFrance"


User currently offlineBA174 From United Kingdom, joined Oct 2009, 749 posts, RR: 0
Reply 6, posted (3 years 9 months 1 week 18 hours ago) and read 2194 times:

Quoting mogandoCI (Reply 5):
AF/KL is constrained purely by national pride. It'll totally suck for the only airline based in Amsterdam to be called "AirFrance"

They have different business models just like BA/IB who from a customer point of view could not be more different e.g. IB only a two class long-haul service compared to BAs four etc, etc.


User currently offlineMNMncrcnwjr From United States of America, joined Jul 2010, 308 posts, RR: 0
Reply 7, posted (3 years 9 months 1 week 18 hours ago) and read 2171 times:

Quoting mogandoCI (Reply 5):
A multiple brand is only meaningful if it offer product differentiation


Absolutely! If there is no product differentiation then there is no real reason .. But so far there really isn't that much airlines can differentiate from one another because they really only offer the savings of TIME. Transportation to a distant place that if accessible via other modes will usually require added time to do so. So the main reason to Fly becomes a Dollar value for time equation.

Now with that said ... They can differentiate on performance, customer relations, inflight features, or just straight budget fares with a pay for added features. Now if one could optimize the basic equation with the added variables (which there are many more) they would probably lock the market .....

The added synergies could be handled with multiple brands. As the holding company can cross train and deploy employees, bulk purchase fuel contacts, similar fleets, consolidate underwing services, one IT system etc. Synergy savings are not limited just due to multiple brands.



CV340/580DC3DC9super80MD88/90DC10717273747576777A319/20CRJ2/7/9F27AVROJET31CITAT5/7/XSAAB340YS11Dash8E135/45/75
User currently onlineWROORD From United States of America, joined Mar 2009, 942 posts, RR: 0
Reply 8, posted (3 years 9 months 1 week 14 hours ago) and read 2093 times:

Many pax would not necessary put an equal sign between UA and CO not to mention Southwest and Air Tran. It is one thing to merge when the company that is being overtaken is failing, but there is really not reason for the two mergers here besides elimination of some competition. I have flown with CO only a handful of times, but they are always in top tier for business travel while UA we all know where Mr. Tilton pushed UA towards the bottom of almost all rankings. So would it make more sense to keep CO brand as more premium business. Same for FL and WN, sort of like Lexus and Toyota. They could have one board of directors, and common HR, payroll and other back office and maintnance operations still saving a lot of money, but possible making more on two brands.

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