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TheStreet Open House

For Post-Merger Takeoff, a Logo Needs Lift

Stocks in this article: AMR UAL DAL LCC

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Ellen Sluder and Neil Wieloch, CoreBrand

NEW YORK ( TheStreet) -- As the market reacts to the latest announcement of job cuts and cost cutting at American Airlines, (AMR) speculation of a takeover is heating up. US Airways (LCC), who had failed in previous attempts to acquire or merge with United (UAL - Get Report) and Delta (DAL - Get Report), has been named by many as an obvious suitor, as well as the private equity firm TPG Capital, in partnership with British Airways. Even AMR's CEO Tom Horton himself has been talking future industry consolidation -- with a newly reinvigorated American Airlines at the M&A helm.

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If a merger is where American Airlines lands, especially with a rival carrier such as US Airways or British Airways, there is an important aspect to think about beyond anti-trust or airport asset redundancies: brand identity.

Historically, the decision on how to merge two large companies' brand identities and logos seems to have been made haphazardly. Due diligence in an M&A scenario helps to vet each company's operational and financial strengths and vulnerabilities for optimal value and growth for the new enterprise. Yet for the most public of assets of the new entity -- its brand identity -- diligent valuation and strategy is usually overlooked.

As a result, new logos seem to result as if the negotiation was a Ping-Pong game between attorneys -- we'll take our symbol, with your colors, our type font and your name. Instead of signaling the new company is a force to be reckoned with -- a combined entity greater than its parts -- the identity ends up a hodgepodge.

Take, for example, the merger of United and Continental in 2010: The new United logo is simply the old Continental logo with a different word in front of the disco ball-like globe symbol. Only the actual letters themselves are from United -- the font, color, symbol and lockup are purely Continental. For someone glancing at the logo quickly, Continental would register in his or her mind.

United Airlines

United's description of the new logo doesn't betray much strategic thought process or market research behind the new logo choice. It states, "the globe symbolizes our combined worldwide network spanning six continents and serving more than 370 global destinations." (Really? A globe to symbolize worldwide reach?)

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