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American Merger May Lead To More Cheap Fares
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Travelers who value cheap travel options, such as cheap airplane tickets, discount travel deals, and cheap vacation packages, may well be pleased with the impact of the American Airlines and US Airways merger, which some travel experts believe will ultimately benefit consumers.
Final approval of this merger was provided by the Department of Justice (DOJ) after the airline agreed to give up dozens of gates in New York and Washington, valued at $17 billion.
American and United agreed to give up 52 slot pairs at Ronald Regan Washington National, 17 slot pairs at New York LaGuardia, and others at Boston Logan International, Chicago O’Hare International, Dallas’ Love Field, Lost Angeles International, and Miami International.
The freed slot pairs are expected to be turned over to low cost airlines, with JetBlue expected to be a big winner. This agreement may also result in the creation of additional low cost startup airlines.
By giving up airport gates in New York and Washington more competition will enter those markets most likely resulting in lower airfares.
The DOJ contends that by turning over American gates in key US airports to low cost airlines that passengers will see more competition on nonstop and connecting routes throughout the country.
Also another byproduct of this merger is that there will be a fourth strong competitor against Delta, Southwest, and United that otherwise would be absent.
American Airlines will be financially stronger as a result of this merger and expects to see its customer service improve. The airline has hired 1,500 flight attendants and 1,000 reservation agents this year and expects to start hiring new pilots shortly for the first time in ten years.
For the merger to be finalized a few more approvals are needed, including a late November U.S. Bankruptcy Court hearing. The deal is now expected to close in the first half of December. Travelers should start seeing the airlines operating as one on January 7th, the scheduled date for frequent flier programs to converge, along with other changes.
The loss of American/US Airways gates at Reagan will likely result in smaller and midsize cities losing service unless the federal government chooses to reassign gates based on guarantees that certain cities would continue to be serviced.
The new American Airlines will have 6,700 flights a day to 330 destinations, making it the largest airline in the world.
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