I would be in favour of mergers once subsidiaries are introduced. Unless by mutual agreement, then shared control.

If Airline A didn't have any assets, then giving Player A the proceeds from the sale (goodwill) would be a good solution.

 

The problem is if Airline A had assets:

Say Airline A has $100M worth of assets and only a debt of $10M so the value of Airline A is $110M.

Airline B purchases Airline A for $150M

$10M goes to pay debts and Airline A is left with $140M that it received from selling their assets and goodwill from Airline B

Airline A restarts as Airline A 2.0 and makes a massive aircraft purchase and then puts their airline up for sale

Airline B (C, D or E) bid to purchase Airline A 2.0 and in essence Airline A becomes an aircraft farm

There would need to be some restrictions to prevent the abuse of M&A for extreme growth

how about the extra "Good Will" Pay get's added to starting costs if the player decides to try again on the world, just a random idea I came up with and just throwing it out there.

To Explain:

Airline A is $10 Mil in Debt

Airline B Buys Airline A for $30 Mil

$10 Mil goes to pay off Debt and if Player who sold Airline A decides to start again he starts with the extra $20 mil (so starting with $27.5 Mil instead of $7.5 Mil, or in the case of World S2, $35 Mil instead of $15 Mil)

another option is the player just starts with the Extra and not added to what would normally start with so in the case above, Player who sold Airline A would start with the $20 Mil and Normal Startup Funds ($7.5 Mil in all but S2 where starting funds is $15 Mil?) would be Negated (Unless Extra is less than normal Starting costs, then would still start off at normal Starting Funds)

It would be difficult to implement realistic mergers and acquisitions (M&A) into AE.

First, the "sales price" of an airline would be its enterprise value (EV).

EV= Market Cap + Debt - Cash

Without a stock market, you can not figure out market cap (market cap = outstanding shares*market value of shares)

Even if we used an airline's valuation as a stand-in for market cap, we can be stuck with people creating ghost airlines to run up debt and then purchase with their main airlines.

 

But then we must look at the benefits of purchasing an airline. These include:

All existing assets (terminals + owned aircraft)

Rights to any aircraft leases

Rights to all gate leases (especially those hard to get foreign gates)

Rights to all existing routes

 

And we also have to look at legit reasons an AE player would want to sell their airline. Some reasons are:

Excessive competition

Excessive Real Life demands

Having other better ranked AE airlines they'd rather focus on.

 

So there are legit reasons to have M&A

 

One way that this can be implemented is that only airlines with positive valuations can be sold.

M&A can only be done after an arbitrary amount of AE round years

Only airlines who put themselves up for sale or airlines with positive valuation who are inactive can be part of M&A

Once that airline (Airline A) is put up for sale, that player loses control of their airline

"Airline A" is then announced to be on sale for anyone in the same home country to bid for

Once the bidding window closes, the winner (Airline B ) is announced.

A month or so later, all assets, leases, routes, debts are transferred to the winning airline (Airline B )

If Airline B pays more than what Airline A is worth, that difference shows up as "Goodwill" on the balance sheet

No airline receives the proceeds from the sale.

 

What are the downsides of M&A?

Decreased employee moral. There will most likely be differences in pay between Airline A & B which will cause an uproar when Airline A's employees get pair more/less then they used to. Also to achieve synergies, redundant positions will be reduced during the first year of merger causing a reduction in employee moral.

Increased payroll. Until synergies are achieved via layoffs, Payroll consists of total payroll of A&B

One-time training costs. Employees of Airline A must learn the best practices of Airline B

Rebranding cost. Painting aircraft, changing logos at airports, new uniforms etc. (just like if you changed your airline's name in game)

Reduced reputation based on the difference between airline's reputations

 

More advantages?

"Merged" aircraft deliveries. Take over delivery spots of Airline A. You can now receive 2 737s every 2 weeks until Airline A's queue is finished

plus all previously mentioned

 

Airlines with negative valuations would not go through this process. Without a solid bankruptcy protection program in AE, leasers will repossess all aircraft and placed in used market, airports will remove unpaid gates and place on the market, and airline would be closed as is done currently.

 

[sorry, I'm bored]

A more likely case would be airline A has huge profits, airline B has huge debts and is making a loss. Airline A buys airline B for 1$ and takes on the debts of airline B.

The real world has competition authorities, less competing airlines on routes and differences in slots. 15 airlines could compete on CDG - LHR, airline A could buy half of these airlines, decreasing competition. In smaller countries on AE, Airline A could buy all the airlines in that country, leaving a monpoly on domestic routes.

How about the banks seize the Airlines and then the bank sold it to other airlines for money, so the previous owner got nothing correct?

so we would see it through the Bank perspective

 

or we would buy 51% of the share so we can take control of the bankrupt airlines, by that we can liquefied the assets and get money out of it 

A more likely case would be airline A has huge profits, airline B has huge debts and is making a loss. Airline A buys airline B for 1$ and takes on the debts of airline B.

But the person who owned it would get any money.

?

the bank took his airlines from him/her

he got debt to pay

he sell his airlines to other buyer

he got money from it to pay his debt

he loses his airlines because he sold it for $

he walk away debt free

he don't have money left because he used it to pay for the debt

yeah i get it, because the player lose control of his/her airlines if they declare bankruptcy, i understand that

what i want to say is that in real life you would lose both your airlines and get into big debts as well, with selling your airlines you then get money to pay for your debt, you lose your airlines but you get money for it, then those money would be used to pay your remaining debts, and bankrupt airlines would have very low value, because they're in debt, so other airlines wouldn't give that much money for those bankrupt airlines 

But the person who owned it would get any money.

Basically:

Airline A has $10 million debts, losing slight money. Airline B has billions and offers Airline A $30 million. Airline A can't use this money, because it no longer exists.

yeah i get it, because the player lose control of his/her airlines if they declare bankruptcy, i understand that

what i want to say is that in real life you would lose both your airlines and get into big debts as well, with selling your airlines you then get money to pay for your debt, you lose your airlines but you get money for it, then those money would be used to pay your remaining debts, and bankrupt airlines would have very low value, because they're in debt, so other airlines wouldn't give that much money for those bankrupt airlines