Here We Go Again — Yet Another Major Airline Merger
Well, here we go again.
Yet another major airline merger has been announced — and few people seem to be happy about it.
Although this consummation of the relationship between US Airways and American Airlines — occurring just in time for Valentine’s Day, I might add — is being discussed ad nauseum just about everywhere, let us first concentrate on what FlyerTalk members are saying.
There are several different discussions about the merger of US Airways with American Airlines, including the following:
- AA – US Merger Agreement / Announcement Discussion
- American Airlines and US Airways approve merger: just the facts, please
- US Airways & AMR / AA Takeover / “merger” Rumors and Discussion (consolidated)
- US Airways and American formally agree to consider merger [New Master Thread]
…and then there are the predictable “What is the impact on [insert airline here]” discussions:
- AA/US merger is official, impact on DL
- Impact of US/AA merger on United fliers
- What effect will AA/US merger have on AS?
- So is US Airways coming across with OneWorld?
- Welcome AA-USAirways to the One World?
- If/when US and AA merge how long before US leaves Star?
Forgive me if I missed any discussions.
It was difficult to find positive comments posted by FlyerTalk members in any of the discussions — and even then, those positive comments were few and far between.
Weblogs everywhere are speculating what will happen, what if this, will this that. What a waste of time.
Let us first stick to what we do know — or can fairly reliably predict, anyway:
- First, this merger is not yet a done deal, as it requires not only approval by federal antitrust regulators — including the United States Department of Justice, which could block the deal — but also by the judge of the court in New York which is overseeing the bankruptcy protection under which American Airlines is still operating, as well as stakeholders of US Airways. However, the deal is expected to be approved — although some stipulations and concessions could be added, such as at airports where the combined airline might have too great of a presence.
- The US Airways Dividend Miles and American AAdvantage forums on FlyerTalk will eventually be combined into one new forum with the former forums as sub-forums of the new forum.
- The combined airline would become the new largest airline in the world. Wow — remember when Delta Air Lines and United Airlines were able to claim that title? Their reigns were short-lived.
- The new entity will be based in Fort Worth, Texas — fort what it is worth.
- Your frequent flier loyalty program miles are expected to be combined seamlessly — although exactly how and when is still unknown. If you have “orphaned” frequent flier loyalty miles in both programs, congratulations — you are that much closer to be able to redeem them for an award ticket without having to lift a finger.
- Reciprocal elite status between US Airways and American Airlines should be honored — but when is yet to be known.
- Competition in the commercial aviation industry in the United States will be reduced to four major airlines: American Airlines, United Airlines, Delta Air Lines and Southwest Airlines — all of which completed major merger deals within the past six years.
- Doug Parker — finally fulfilling his dream quest to head the largest airline in the world — will be the chief executive officer of the new entity. Remember when US Airways was supposedly in talks to buy United Airlines and purchase Delta Air Lines through a hostile takeover?
- Yes, this is speculation, but I would bank on the newly combined American Airlines to remain in the oneworld alliance. After all, it would be illogical to have two major airlines in the United States as part of Star Alliance and none as part of the oneworld alliance.
Now, the questions on which I do not intend to speculate include but are not limited to the following:
- Will capacity and service be further diminished?
- Will airfares increase?
- What problems will occur as a result of merging the corporate cultures?
- Will elite benefits be diluted by too many elite members in the combined frequent flier loyalty program, as many FlyerTalk members seem to predict?
- Will the travel experience worsen overall?
- Which frequent flier account number will prevail — the Dividend Miles or the AAdvantage number?
- How many employees will be relieved of their positions from the merged entity?
- How will routes be adjusted for efficiency regarding the new American Airlines?
- How will existing airline partners be affected?
- What hub airports will disappear into oblivion?
- Which passenger service system will the combined airline use?
Many of these questions can be answered simply by looking at the mergers of other airlines within the past six years. Employees will indeed be let go. Earning elite status should become even more difficult to attain. Airfares will most likely increase. Flights will probably be more crowded. Benefits and perks will be reduced overall for many frequent fliers — except for the business and leisure traveler high spenders, of course…
…and do not expect the merger to go quickly or smoothly by any means. There will be a period of inconvenience for you as a customer as the culture and technology of both airlines are combined. Problems will arise, and the pace of their resolution will be lethargic at best. You are in for the long haul — just ask those FlyerTalk members who already experienced other major airline mergers in the United States.
Will the airline industry soar after consolidation, however? Jonathan Spira of Frequent Business Traveler magazine seems to believe so, as he argues that “Today, planes fly fuller and the industry is moving towards an era of sustainable profitability and higher credit ratings. Granted, if the American Airlines-US Airways merger goes through, travelers will have fewer choices – four airlines would then control ca. 83% of all domestic seats – but that industry would presumably be more stable and hopefully provide more reliable service to its passengers.”
As I said earlier, very few people seem to be happy: those who like the idea of suddenly having more frequent flier loyalty program miles towards award travel as they are combined from the two airlines merging into one; and — of course — those who stand to profit greatly from the deal financially.
So what should you do about it?
Nothing. What can you do — aside from take the whole thing in stride and wait and see what actually happens?
If you are mourning the loss of anything even remotely related to the merger between US Airways and American Airlines, guess what? The sun will still rise tomorrow, and the planet will still revolve. Life goes on.
However, if you are truly miserable about this news, you can always defect to another frequent flier loyalty program — or quit the “game” altogether…