STRATEGIC MERGER PRACTICES AND OPERATION EFFICIENCY OF AVIATION INDUSTRY IN KENYA
Keywords:
Merger Planning, Merger Integration, Strategic Merger Practices, Operational Efficiency, Aviation Industry in KenyaAbstract
The aviation industry in Kenya plays a vital role in supporting trade, tourism, and economic growth, yet it continues to face persistent challenges related to high operational costs, inefficiencies in service delivery, and limited infrastructural capacity. Despite the growing use of strategic mergers and alliances as a means to improve competitiveness and efficiency, there remains limited empirical evidence on how these practices influence operational outcomes within the Kenyan context. This study therefore examined the influence of strategic merger practices on the operational efficiency of the aviation industry in Kenya, focusing on four key constructs: merger planning and merger integration. This study employed a descriptive correlational research design. The target population comprised 189 management-level employees drawn from nine aviation companies in Kenya that had engaged in mergers, acquisitions, or strategic alliances between 2014 and 2024. The unit of analysis was the aviation firm, while the unit of observation was the management staff directly involved in planning, operations, and strategic decision-making. Using Yamane’s (1967) formula, a sample size of 128 respondents was determined and selected through stratified and purposive sampling techniques to ensure proportional representation from management, operations, and technical departments. Descriptive statistics (means and standard deviations) were used to summarize responses, while inferential analyses, specifically Pearson correlation and multiple regression, were applied to test hypotheses and determine the relationships between variables. The findings revealed that merger constructs had positive and statistically significant relationships with operational efficiency. Correlation analysis indicated strong associations while regression analysis showed that merger planning (B = 0.285), and merger integration (B = 0.241), significantly predicted operational efficiency. The regression model yielded an R² value of 0.764, indicating that 76.4% of the variations in operational efficiency were explained by the four strategic merger practices, with the remaining 23.6% attributable to other factors such as technological innovation, regulatory frameworks, and financial constraints. The study concluded that Firms that conducted thorough merger planning ensured effective post-merger integration achieved greater operational coordination, cost reductions, and service reliability. The study recommends that aviation firms institutionalize structured merger planning frameworks incorporating risk assessment, stakeholder engagement, and contingency planning. The Kenya Civil Aviation Authority (KCAA) and the Competition Authority of Kenya (CAK) should streamline merger approval procedures and provide policy support to encourage consolidation while maintaining fair competition.
Key Words: Merger Planning, Merger Integration, Strategic Merger Practices, Operational Efficiency, Aviation Industry in Kenya
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