Transport Airlines

American Airlines-US airways merger FAQ: What it means for travelers

@denschaal

Feb 08, 2013 8:07 am

Skift Take

An American Airlines-US Airways merger would mean huge changes for the global aviation industry and travelers. But, sit back and relax: You won’t feel much impact for at least a year.

— Dennis Schaal

Win an All-Expenses Paid Trip to NYC to Tour the Future of Travel

Chris Keane  / Reuters

A US Airways passenger asks a question while checking in for his flight at Charlotte Douglas International Airport in Charlotte, North Carolina April 20, 2012. Chris Keane / Reuters


While the bigwigs at American Airlines and US Airways maneuver, cajole and haggle over the details as they attempt to create the country’s largest airline, it is worthwhile looking at what the merger, if it goes through, would mean for travelers.

Here’s a consumer FAQ on some of the hot-button issues:

What would happen to fares?

One thing is clear for consumers: Expect fare increases. Combining the two airlines means there are nearly two dozen routes in the U.S., including many that feed through the two airlines various hubs, where competition would be significantly reduced. The Department of Justice will ultimately take a look at competition issues, and American might have to give up some slots or make other concessions here and there, but the loss, in effect, of a legacy carrier means that capacity will be taken out of the system, and raising fares would be easier. In that regard, airlines such as  Delta, United, Southwest, and JetBlue are cheerleading for the merger, too.

Will there be immediate changes?

There won’t be any sudden changes to fares, routes, or frequent flyer programs because it could take up to a year or so for the merged airlines to win all the U.S. and international regulatory approvals they need. And, after that, changes would come gradually. Although the new brand, repainted tail and all, would be American Airlines, US Airways and American Airlines would operate as separate brands for an extended period, and fully integrating the two airlines could take several years.

Will customer service be any better?

As we’ve seen from the United-Continental merger, putting two airlines together can be extremely rough, and if the American-US Airways pairing follows any kind of parallel track, then there could be service disruptions at the airport and online during the first year or so after the transaction closes. But, once those nasty little details are resolved, there is the possibilty of a mini-cultural revolution at American Airlines if US Airways CEO Doug Parker takes the helm of American Airlines, as is expected. Parker is said to be a dynamic, affable guy, with the intangibles to bring changes to the status quo at American.

Parker has run a profitable airline where passenger-oriented metrics such as on-time performance and mishandled baggage statistics have been leading the way. There have been signs that Parker can do a better job than American Airlines CEO Tom Horton, at dealing with the merged airline’s nagging labor problems, although that will be a huge and vital struggle nonetheless.

Will I still be able to find a nonstop flight to my airport?

It may not happen overnight, but as the merged airline consolidates some operations and routes around its hubs and focus cities, service to smaller cities will almost inevitably suffer, meaning you will have to find more connecting flights to get to your desired destinations. If you live in or need to travel on business to a smaller city, this isn’t going to be pretty.

What airline alliance will it join? How will that affect my international travels?

US Airways is currently part of the largest global alliance, Star Alliance, but the merged airlines likely would join American Airlines’ Oneworld alliance. Current US Airways passengers would see their domestic flight options expand, but their international flight choices, particularly for China and South and Central America, would be pinched. Oneworld, the smallest of the three global alliances, is weakest in those regions, although it has muscle in North America, Europe, and Japan.

US Airways Dividend Miles or AAdvantage?

Although details of a merger agreement are being hashed out and final decisions on a whole variety of fronts haven’t been made, you’d have to assume that the larger airline’s frequent flyer program, American’s AAdvantage, would be the new American’s passenger loyalty program. Members of US Airways’ Dividend Miles program likely would have their mileage accruals transition to AAdvantage, as has been the custom in most previous mergers. The trend in frequent flyer programs across a broad array of airlines is to emphasize benefits to super-elite travelers as the lowly, non-elite members get short shrift. There is no reason to believe this would be any different at the larger American Airlines.

What would happen to the US Airways name and brand?

The two airlines have already agreed that American Airlines, with its new logo and livery, would be the surviving brand, and the US Airways brand would fade away, although that process could take a number of years. American Airlines is already busy creating new uniforms for the airline so US Airways and American Airlines employees who survive the inevitable layoffs can expect to be measured for some new duds.

Dallas or Tempe, Arizona?

If you need to write a complaint letter to a new, merged American Airlines, address it to Dallas, home to American Airlines, and not Tempe, Arizona, where US Airways Parker currently reports to work. Then again, the DOT and FAA like to collect complaint letters, as well.

Is this a done deal?

While a merger announcement between US Airways and American Airlines could come as soon as February 11 or 12, and all signs point to a marriage, anything could happen and the deal could blow up. American’s Horton for a long time pushed the idea of American emerging from Chapter 11 as a standalone airline, and American’s management team had incentives built into their contracts to do so. Horton’s role, if any, at the merged airline could be a sticking point, although there is so much pressure from creditors, unions, and others to get a deal done, a consummation seems highly likely.

Are we finally done with all of these airline mergers?

Not necessarily. While network carriers in the U.S. are likely done combining among themselves for awhile, American Airlines may have further designs on Alaska Airlines; and Frontier Airlines is in play, as well, according to George Hobica, founder of Airfarewatchdog. But, American likely would have its hands full with US Airways for the time being.

Tags: , ,

Follow @denschaal

Next Up

More on Skift

Majority of Americans Are Against Using Knee Defenders on Airline Flights
Average U.S. Hotel Rate Nearly Hit an All-Time High in First Half of 2014
Interview: Expedia’s CEO on the Transformation of Travel Booking
Free WiFi Tops Business Travelers’ List of Hotel Must-Haves