Today US Airways announced its merger with the bankrupt American Airlines to the tune of $11 billion dollars. However, the new fleet, which will now be the largest in the US above United, will go under the name American Airlines. If they can get through all of the red tape, it is speculated this deal should be closed by September. What do you want to bet that won’t happen??
I don’t know about you, but for the last 10 years I have tried to stay as far away from both airlines due to bad service, old planes, layovers, etc. On so many levels, neither were very appealing. But that doesn’t mean I’m curious to see how it will effect the market.
“The past eight years have been merger mania for airlines: Delta and Northwest, Continental and United, Southwest and Air Tran, and now U.S. Airways and American. If this latest deal is approved, we’ll have just four major domestic airlines. You might think all this is going to lead to much higher prices for flights, so you might be surprised to hear…there’s less competition in some places, but John Kletzel (from Price Waterhouse Cooper) says airline mergers are different” and will not have an impact on prices.” – Dan Bobkoff, NPR
Some say the merger is in the best interest of the airlines, employees, and travelers. It’s not front page news that discount sites, gas prices, and a host of other issues have caused airline profit margins to suffer. According to NPR, American employees have been unhappy for a while now so this should “re-energize them” and get your better service. Their existing routes don’t overlap much, so the new American will have a bi-coastal presence.
Of course as travelers we are sympathetic to the employees, but let’s be honest, we want to know about our miles and frills.
Travel expert Gary Leff (my go-to source for all travel fine print), says here it’s too soon to tell how the frequent flier programs and perks will play out. But, for example, if people were frequently getting upgraded due to lax rewards programs, this could mean those people are headed to the back of the bus.
John Kelley of ThePointsGuy.com said in an interview, “January, I used 110,000 U.S. Airways miles and flew to South Africa. That same exact trip using American miles would be 150,000.” So even though your “miles are safe.” you might need more to get from A to B. Whatever the case may be, you don’t have much choice in that matter.
Now, if you really want to win the rewards game, you can apply for this credit card BEFORE the merger (apparently multiple times) and cancel it. To be strategic about it, read Gary’s plan.
As I can attest from the United-Continental merger, this will take a VERY long time to sort out, so you’re safe for now. On the bright side, I really don’t think it can get much worse for you as an American or US Airways frequent flier. If anything they are going to have to up their game to stay competitive with United and Delta.