West America Airways US Stalls On Takeoff
A merger of the 7th and 8th largest U.S. airlines leads to dilemma: What to name the integrated company?
Well, if you are the executive team of the two companies involved, US Airways and America West, you naturally take advantage of your market opportunity and call upon a brand expert to assist in developing the answer to the question.
Or do you?
Certified smart guys the new company CEO and his team may be, but brand pilots they are not, as evidenced by this brand debacle.
According to The Arizona Republic, and “based on research into the branding strategy of more than 200 corporate mergers and acquisitions,” executives leading the US Airways-America West business integration have already made one huge mistake.
Senior management has decided to retire the lead firm moniker, America West.… The merger creates a new airline with an enhanced route network and international presence beyond that enjoyed by America West and conveyed by its brand.
In its place, the new re-branded entity will be introduced as (drum roll please) … US Airways. Kind of leaves you grounded, doesn’t it?
Naming the new entity US Airways is a bad idea. It creates a winners-and-losers mentality inside the new organization (and possible confusion - remember, America West is the lead firm here) and signals “business as usual” with a brand that does not exactly enjoy a best-of-breed standing among domestic carriers.
This is hardly the message one would expect from a new company seeking a fresh start… Management has a chance to articulate and deliver on a new strategic vision. A tired, old brand name squanders that opportunity.
The new airline hopes to compete with low cost rivals Southwest Airlines and JetBlue. To communicate a new brand position, the newly integrated US Airways will also sport a new stock ticker symbol, LCC, denoting “low cost carrier.” This repositioning, as faint as it is, speaks solely to those deciphering financial market acronyms rather than to consumers and employees of the new company.
Selecting the US Airways name burdens the new company with the negative perception of recent US Airways bankruptcy history, filing twice in two years.
Merging companies are quick to address legal, financial and management consequences of business integration before, if at all, thinking of the competitive advantage opportunity afforded by effective brand strategy. Post-merger is often too late, as no brand is afforded a second opportunity to make a first impression.
To overcome the baggage of the US Airways brand, the new airline instead institutionalizes a year-over-year need to spend far more in advertising than would have otherwise been necessary, in a time of rising fuel costs and hyper-competition.
By recycling a name with a poor reputation, the “new” US Airways brand will have difficulty getting airborne.
