US Airways and American Airlines’ Mega-Merger
In an $11 billion deal that would create the world’s largest airline, American Airlines and US Airways have agreed to merge. The new airline will take the American Airlines name to help keep the company afloat after it filed for bankruptcy more than a year ago. The mega-merger deal is scheduled to close in the third quarter of 2013 and make its debut at an airport near you — well, sometime soon.
So what does this pending merger mean for travelers? For one, less competition in the airline industry could mean price hikes for customers. The new American Airlines — with 900 planes, 95,000 employees and 3,200 daily flights — will have the scale, breadth and capabilities to compete more effectively, according to US Airways CEO Doug Parker. The new American, along with United, Delta and Southwest, would control over 70% of the US market. So frequent fliers are warned to expect a rise in ticket prices.
Travelers flying American or US Airways won’t notice immediate changes. Industry officials say that it’s likely the airlines will operate separately for the first year and that existing tickets will be honored. However, it’ll be months before the frequent-flyer programs are combined and years before the 2 airlines are fully integrated.
For corporate business travelers, there may be a few perks. US Airways and American officials expect the combined network of flights and routes to lure corporate travelers away from competitors.
The new airline will keep all hubs for both airlines, but no word yet on a location for the operations center, reservations, flight training, and maintenance and crew bases.