On the Design of Flight-Deck Procedures - Intelligent Systems ...

5.3 MERGERS AND ACQUISITIONSMergers and acquisitions between airlines have been occurring at a dizzying pace since the enactment ofthe Airline Deregulation Act of 1978, and similar legislation in European countries. Today there are few“pure” airlines - all have mixed parentage, some of which is so complex that a given airline's tributariescan best be communicated by drawing a family tree. For example, the present Northwest Airlinesacquired Republic in 1986. Republic in turn was the product of a three-way merger in the early 1980'sof North Central, Southern, and Hughes Airwest. Furthermore, Airwest itself was the product of themerger of a number of smaller airlines. One could probably not find (or create) three more diversecultures.Mergers and acquisitions produced three effects that interest us here:1. The corporate culture, which we shall discuss in Section 5.4, and other influences attributable tothe history of the acquiring companies, are highly diluted. Although the acquiring company'sculture has tended to prevail, due partly to geographic influences, the resulting companies nolonger have a strong, unalloyed corporate culture.2. The acquiring company suddenly finds itself with mixed fleets of aircraft; various cockpitconfigurations of aircraft they already had; and aircraft that they did not previously operate. WhenNorthwest acquired Republic in 1986, it became heir to the world's largest fleet of DC-9s. In sodoing, it also acquired a vast fund of experience in two-pilot operations. Prior to that, with theexception of a small number of B-757s acquired just before the merger, Northwest had had notwo-pilot aircraft in over two decades.3. With the mergers and acquisitions come mixtures of not only fleets of aircraft, but pilot groups,procedures, checklists, and other documentation. An immense standardization, training, andrewriting job results. The new standardized procedures are, of course, based on the philosophyof the acquiring company, which is sometimes very different than the philosophy of the acquiredcompany (Degani and Wiener, 1990)The acquiring company typically hastens to make what revisions are necessary to operate the acquiredfleet. In the case of aircraft that are new to the acquiring company, it is a vast, sprawling task to imposeits philosophy, policies, procedures, methods, and documents on the new fleet and crews. Often theprocess antagonizes the pilots from the acquired fleet, who feel, perhaps with some justification, thattheir former company is the best authority on how to operate their aircraft. Nonetheless, standardizationmust take place; a company cannot efficiently operate under two sets of operations philosophies andprocedures. A firm stand must be taken, or the operation will constantly “weave and curve” its operatingphilosophy in order to provide some floating compromise. This will result in constant changes inprocedures that will not only confuse pilots from both acquired and existing airline, but will also alienatethem. Wolff (1991, pp. 22-23) describes the takeover by Delta of the Pan American shuttle: “Within afew days, we pilots received a 135-page addendum to our operating manual that described the aircraftdifferences... Some of these differences required changes and additions to Delta's normal procedures,so we also received about 100 pages of those to put into our manual after removing the original pages.”In summary, mergers and acquisitions impose upon the acquiring carrier the immense task of meldingthe two (or more) carriers into one. As we have noted, the acquiring carrier is confident that its way ofoperating is superior, and in the interest of standardization, imposes its procedures upon the acquiredcarrier(s). However, we might comment that it is probably the wise management at the acquiringcompany that looks carefully at the procedures and documentation of the acquired fleet to see if there issomething to be learned.Finally, we take note of the fact that the next series of mergers and acquisitions are likely to involveinternational carriers. The first steps in this direction have already been made. If such mergers occur,this will superimpose upon the usual problems of melding two (or more) carriers and their cultures newproblems (and opportunities) international in character. For a discussion of cultural differences betweencarriers, see Johnston (1993) and Yamamori and Mito (1993).18