3 On Your Side: US Airways – American Airlines Merger
By Jim Donovan
PHILADELPHIA (CBS) - It’s a Valentine’s day match, but will it fly? American Airlines and US Airways formally announced Thursday that they have agreed to merge in a deal worth $11 billion.
This is really a perfect example of “if at first you don’t succeed, try, try again.”
US Airways has been looking for a merger partner for several years.
First they wanted to merge with Delta, then with United, but finally they found a match in American.
“This is a historic day for aviation we’re going to partner with a great company, a company that has an iconic name, American Airlines,” says Robert Ciminelli with US Airways.
US Airways has 444 daily flights out of Philadelphia, the largest number of any single carrier. American has 15.
Combining resources globally will make them the world’s largest airline.
“It’s a very complimentary network when you put the two together. There is something on the order of 900 routes that we fly today, but of the 900 routes we only overlap on 12,” says Chuck Shubert with American Airlines.
The new American will offer 6,700 daily flights to 336 destinations in 56 countries with hubs in Philadelphia, Charlotte, Chicago, Dallas, Los Angeles, Miami, New York, Phoenix and Washington D.C.
The carrier will have a workforce of 95,000 employees; 9,100 of which work in Pennsylvania.
“I think it’s good for our employees, our customers and our community,” says Ciminelli.
Experts are divided on how the merger will impact tickets prices.
“Even though people say that this particular merger of US Airways and American Airlines isn’t going to raise ticket prices, I don’t believe that one bit,” says Farecompare.com CEO Rick Seaney.
“Consumers are going to have a lot of choice, we’re going to see fares being moderated because the amount of competition,” says aviation consultant Daryll Jenkins.
It’s expected that frequent flyer miles will be rolled into one program, likely American’s.
“This may actually work out to a lot of people’s advantages because they are going to combine your lifetime miles from both airlines into one so you may actually qualify for lifetime elite status and other perks as well,” says Brian Kelly of ThePointsGuy.com.
US Airways frequent fliers currently can use their miles on 27 other airlines; if the American frequent flyer program is adopted after the merger that drops to 12.
“The ability to redeem miles on partners is going to decrease,” according to Kelly.
For now at least, those with existing tickets and members of both frequent flier programs shouldn’t expect changes anytime soon. American is currently under bankruptcy protection and the merger needs to be approved by the bankruptcy judge as well as anti-trust regulators.