Impact Of American/us Airways Merger

By Author: Steve Robinson
Total Articles: 467
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Given that the new American Airlines will be the country’s largest, many travelers are wondering what impact this merger will have on cheap fares, including cheap airplane tickets, cheap vacation packages, discount travel packages, as well as a variety of services.

This merger is expected to close by the third quarter of this year, if it receives approval from Justice Department antitrust regulators and US Airways shareholders.

American Airlines has said that the impact of the merger will be to offer travelers more destinations and has played down the merger’s impact on ticket prices and upgrades.

Industry experts believe this merger could result in the following changes:

• Overall this merger is not expected to result in higher airfares across the country. However, specific routes are expected to become more expensive. American and US Airways jointly fly about 900 routes of which only 12 overlapping. Higher fares are only anticipated between hubs where there is little competition.

• Travelers will be able to fly to more destinations from more cities on the new American, which will ...
... have more than 6,700 daily flights to 336 destinations. American and US Airways say that they will retain all their hubs. Industry experts believe otherwise. For example, American may reduce flights in Phoenix, a US Airways hub, given its proximity to American hubs in Dallas and Los Angeles. Philadelphia, a US Airways hub, may lose flights to Kennedy International Airport, an American hub.

• US Airways frequent flier program will be merged into American’s AAdvantage program, with miles being transferred on a one to one basis. American’s frequent flier program will add over 100 million US Airways members, creating greater demand for award seats. Seat upgrades are not expected to be as readily available to leisure travelers and bottom tier members.

Currently US Airways loyalty members get unlimited free upgrades based on their status and when they request an upgrade. American has a different policy whereby only its top tier members receive free upgrades on any published fare.

• Many fliers will benefit when their American and US Airways miles are combined because suddenly they will have enough miles to fly free or be bumped up a tier in status. US Airways has four tiers where as AAdvantage has three.

• American will keep its Oneworld alliance, with 12 partner airlines, meaning US Airways frequent fliers will have fewer options than they have now with the Star Alliance network and its 27 partner airlines.

• Given that American is the most generous airline serving food to its elite fliers and US Airways is the least, the merged airline may split the difference. American Airlines elite fliers are offered meals on flights of less than two hours whereas US Airways elites are only served meals on flights in excess of 3 hours and 15 minutes. American’s elites are expected to no longer be served food on select regional flights.
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