If you’re surprised about the impending announcement expected Thursday morning of a merger between US Airways and American Airlines then perhaps you should get out more. It has been the talk of the industry pretty much since American filed for Chapter 11 bankruptcy protection over a year ago. And now the speculation about when they will merge can end, replaced with even better speculation about what will happen to the merged carrier.
We know a few things, or at least we’re pretty sure. Doug Parker will be in charge; Tom Horton will be a non-executive Chairman and will be paid handsomely for bringing the company almost out of bankruptcy. The carrier will keep the American Airlines name, brand and Texas headquarters. They will remain in the oneworld alliance and keep AAdvantage as their loyalty program. No surprises there.
But what about the things we don’t know?
- What happens to the Alaska Airlines partnership, for example? Especially considering the recent announcement of an even tighter partnership.
- When will Dividend Miles be rolled in to the AAdvantage program and which program rules will they keep. The two are plenty different and there are plenty of reasons both sides will lobby to keep theirs.
- Which hubs get shut down?
- Will they ever figure out how to expand into Asia and Europe in a sizable way without depending on partners?
- Which PSS will they choose? American has been looking to get a new one for some time now; will they use the merger as the impetus to replace both systems with something brand new?
- How long until the extensive short-haul network US Airways operates on the east coast can be redeemed for tiny amounts of Avios?
- Just how badly will consumers get screwed with less competition and higher fares?
Oh, and perhaps the biggest question of them all: Will Doug’s plan to use the AA unions to out-vote the US and HP unions and end their integration woes actually work?
In the meantime, make sure you look at a status match to Alaska Airlines Mileage Plan program, just in case. And now is probably a good time to pick up a US Airways credit card if you haven’t lately. Getting an extra 40,000 points in the combined program isn’t a bad thing.
Definitely going to be fun to watch over the coming months, more so than watching the speculation about when the merger was going to happen.
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I agree 100% with the last sentence. It has been a boringly slow march to a merger but now the real mayhem begins!
I’m sure the AS/AA partnership will survive. US doesn’t have a big west coast to west coast presence.
I’m glad i moved my excess annual mileage from AS to UA as i knew this was going to happen. My first ever status was in 2008 as a US Silver. I didn’t like them from the start but their schedules worked mixing work and the long distance relationship I was in
And I can easily see the new combined carrier shifting some of their capacity around, attacking the west coast with gusto. They’ve already got a decent amount of lift at LAX and adding in SFO, SEA and PDX to go vertical rather than to PHX wouldn’t be too hard.
I hope the AS partnership survives as well. Any idea if one way redemptions will still be available?
@Seth : new LAX build-up within west coast would end up competing with both AS and WN … hard to make money in such scenarios
The best way to strengthen LAX is by adding TPAC flights.
I wouldn’t do anything with LAX apart from cut duplicate routes, LAX is pretty much divided equally among all the carriers and there is no real way to attain a dominant position here and reap the benefits that that brings. Sure they will be able to dominate some routes like LAX-PHL or LAX-DFW, but not for any significant gain.
I wouldn’t expect them to dominate at LAX, but if you have to pick one hub on the west coast I’d take LAX over PHX. PHX offers very little convenience for connections and there is arguably just as much competition with WN there. Putting more service on the north-south corridor from LAX would be facing stiff competition, but it would be awkward as the world’s largest carrier to be dependent on a partner for such a big chunk of the US market.
I have a TK J-class RT purchased for Oct/Nov (LAX-IST-DEL) and am wondering whether I will be US FF credit for it.
What are the pros and cons of changing my allegiance to UA? I fly both domestic and intl … and almost always get upgraded on domestic flights.
P.S. I live in PHX and have been elite since the HP days, which is why I’m US elite (100K miles/year).
I don’t know that there is a firm date for US to leave *A yet. By October it might be a done deal and it might not, but I’d bet not.
If you’re flying enough to make Chairman/EXP I’d probably stick with them, assuming the fares/routes still work. You’ll likely keep a similar upgrade rate unless they completely change the program around. And if they switch to the AA eVIP upgrades you’ll likely do better – at least on fare – than you would with United. The bigger question is if the AA network hits the international destinations you need. If they change that program things could be different.