Research On Synergistic Effect Of M & A In Airlines

With the increasing competition of air transportation, the survival and development has become an important focus of airline companies. As a more convenient and cost saving way to obtain core competitive power for the company, M & A has become the most popular way for most airline companies. Synergy effect in M & A is the most important factor to judge whether a merger and acquisition is successful. As a result, how to evaluate the synergy effect in M & A plays an important role in study of M & A.This paper presents a study about the synergy effect of Eastern Airlines merger Shanghai Airlines. We first use event study approach to judge whether the synergy effect exists, we take the price of stock as samples to analyze the cumulative abnormal rate of return. Then according to the result, we point out the feature of this M & A and analyze the synergy effect in three aspects:the management synergy effect, the operating synergies, and the financial synergy effect. At the same time, in order to ensure it is due to the synergy effect in M & A with the improvement of the operation of Eastern Airlines, we analyzed the other two important aspects which seriously influence the revenue, cost and expenses, that is exchange rate and international crude oil price.Through this study, it will help us know better about the synergy effect of airline companies in M & A.