The potential AA/USAir merger — if it ever happens

by Janice Hough on September 7, 2012

American Airlines and US Airways have been rumored to be merging longer than Brett Favre contemplated retirement.

The rumors are still out there. American Airlines flight attendants, who just ratified a contract, have publicly affirmed their support for such a merger.

Will it happen? Maybe. But it might not be too soon for travelers to start thinking about how it might affect them, and to plan accordingly.

To be fair, any merger would probably take over a year to happen, especially with all the approvals that would be involved; the new airline would be one of the country’s largest and antitrust studies will be extensive. So, changes won’t happen overnight. But there will be some changes passengers should watch for.

An early change would almost certainly be US Airways leaving the Star Alliance mileage program and joining American’s AAdvantage program.

As far as mileage redemption, US Airways does not have that many prime destinations that other Star Alliance carriers do not serve. They do, however, have a strong Caribbean presence that United and Continental lack and more flights throughout the southern U.S.

Thus, even travelers who haven’t redeemed awards with US Airways often use the carrier to earn United miles, miles that count towards elite status.

In addition, perhaps because they have few nonstop cross-country flights, except to and from Philadelphia, US Airways often has inexpensive fares, especially at the last minute, and those may well disappear as part of an American/US Airways merger.

US Airways also often sells international discount fares through consolidators in both coach and business class, which American also is less likely to continue on their routes.

There’s also the hub issue. US Airways now has hubs at Phoenix, Charlotte and Philadelphia. As travelers in places like St. Louis and Cincinnati know, airline mergers are not kind to lesser hubs. Most of TWA’s St. Louis flights have disappeared since American took over, along with many of Delta’s flights from Cincinnati, now that Delta has merged with Northwest. What might happen to US Airways’ hubs. Will they all survive?

Again, at this point, the merger talk is just talk, and nothing in the airline industry moves quickly. But, my suggestion for anyone planning travel with US Airways using miles is to book as soon as possible.

If you have an award ticket booked with US Airways on a partner carrier, it will remain valid. If it’s on US Airways and the carrier drops a route, American should honor the ticket.

Also, a merger may well create a run on award tickets, especially if there is a deadline for travel under the old system, and especially to destinations that Oneworld carriers don’t serve as well as Star Alliance.

For example, US Airways partner United has a lot more flights to Hawaii than American. On the other hand, American has much better service to the Caribbean.

Finally, airfares usually don’t go up immediately upon a merger announcement, but pay attention to any proposed official date. When United merged with Continental, fares to Newark, for example, stayed low until the Continental name disappeared, then in some cases airfares (San Francisco and Los Angeles to Newark, for example) almost doubled overnight.

There will no doubt be other changes if this merger happens, especially to inflight entertainment and service. Plus, passengers and frequent fliers will be inundated with joint announcements that the new airline will be a boon to consumers. Don’t bet on the last one.

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  • Anonymous

    Exploring a business combination with US Airways in addition to British Airways is part of AA’s “due diligence” to examine all avenues to give the best outcome for the unsecured creditors, employees and other stakeholders.

    Just as the bankruptcy judge required more negotiations with the pilots before abrogating the contract, he will require AA to explore several alternative approaches to reorganization.

    And just as it looked hopeless the pilots would ever voluntarily come to terms with AA management, it will be a fruitless effort to merge with a much weaker carrier, US Airways, repeatedly ranked last in customer satisfaction among legacy carriers on several scientifically conducted polls. Its labor relations record is actually worse than AA. How does that solve endemic problems?

  • Anonymous

    I don’t see much overlap between the hubs of the two airlines. PHX is pretty far from DFW, and neither PHL or CLT are anywhere near ORD. MIA isn’t really that close to CLT, and they serve very different markets, although I could see some re-shuffling between the two take place. The “secondary” hubs of both carriers are long-gone.

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  • Deus Lux

    Here I go on
    my rant again; exchanging an alliance like Star Alliance with One World would
    be a disaster.

    British
    Airways has fallen greatly since I last flew them in the late ‘80’s.

    Star Alliance
    is the best out there; Sky Team is close.

    But One
    World has nothing to offer past UK and if you connect through Heathrow from what
    I have heard and read is nothing but hassle.

    97% of my
    travel is international, and I have been very happy with the connections and
    times that SA has scheduled.

    Tried running
    a few itineraries using OW and was not smooth, bad connections and times.

    Surely US
    Airways can do better than AA.

    Why doesn’t US Airways line up with
    Lufthansa like Delta has with KLM/Air France.

    Not a legal merger (not allowed I
    think), but a de facto one.

  • Deus Lux

    Sorry I cut a pasted, did not come out well.

  • Neal1

    I am sorry, but in my opinion, the reverse will happen. The same as Continental – United merger. US Airways will be purchasing American but will probably use AA name as means more. They will remain in Star Alliance and dump One World which is of no value. The Star Alliance has by far the best partners with the exception of Australia destination. I foresee the Phoenix hub staying as AA has no really far enough West Coast presence. I can see the Philly hub dissapear as not really vital as JFK will be the new connect point which AA has. But with JFK, you could also eliminate Charlotte. You will see the removal of the Business Extra program for companies which will be a huge mistake. But US Air doesn’t believe in corporate rewards.

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