What the American Airlines/ US Airways Merger Will Mean for You
Nov 12th 2013 1:02PM
Updated Nov 12th 2013 1:06PM
NEW YORK -- American Airlines and US Airways (LCC) have cleared the last major hurdle to merging, now that the Justice Department has agreed to the deal if they scale back their combined footprint in some major airports. But it will be several months -- if not years -- before passengers see any significant impact from a union that will create the world's biggest airline.
Passengers with existing tickets on American or US Airways -- and members of both frequent flier programs -- shouldn't fret. No changes will come immediately.
Since announcing the deal in February, the two airlines have been working behind the scenes to try and make the merger as seamless as possible. Following Tuesday's agreement with the Justice Department, the two airlines said they expect the deal to close in December. But that doesn't mean everything will happen overnight. When the deal does close, here's what passengers can expect:
During the past five years, the airline industry has seen the combinations of Delta (DAL) with Northwest, United (UAL) with Continental and Southwest Airlines (LUV) with AirTran. The price of a domestic round-trip flight has climbed more than 15 percent since 2009, when adjusted for inflation, according to the Bureau of Transportation Statistics.
The merger will give a combined American and US Airways Group Inc. the ability to increase fares. United, Delta and Southwest would be likely to follow. Although it could also pave the way for further expansion by discount airlines such as Spirit Airlines (SAVE) and Allegiant Travel (ALGT).
Frequent Flier Miles
Your miles will be safe. After the merger closes, the two airlines will likely combine the miles into one program and elite status from one airline will likely be honored on the other. That puts the occasional traveler closer to rewards.
A key reason for merging is to link both airlines' networks, creating a system on par with Delta Air Lines and United, part of United Continental Holdings.
There is little overlap between the two airlines' existing routes. The combined carrier will offer more than 6,700 daily flights to 336 destinations in 56 countries, making it more attractive to companies seeking to fly employees around the globe with few connections.
US Airways passengers will gain access to American's international destinations, particularly London and Latin America. American's passengers will be able to better connect to smaller U.S. cities that US Airways serves.
The combined carrier will have considerable presence in New York, Philadelphia, Washington, Charlotte, N.C., Miami, Chicago, Dallas, Phoenix and Los Angeles. It is unclear how many of those cities will keep their levels of service. In past mergers, airlines have promised not to close any hubs but have gone ahead and dramatically reduced service in once-key cities.
The merger of two airlines often means confusion and hassle for customers. Which terminal or ticket counter do they go to for check in? If there is a problem with a ticket, which company should they call? For a while, United and Continental were issuing two confirmation numbers for each ticket so either airline's staff could make changes. Problems with the integration of their frequent flier programs angered many loyal road warriors and computer glitches caused repeated flight delays. It could be months, if not years, until all American and US Airways planes get a uniform paint job.