Reporting Jim Donovan
By Jim Donovan
PHILADELPHIA (CBS) – It was the worst kept secret in the airline industry, but Thursday they made it official. American Airlines and US Airways are joining forces, merging to create the world’s largest airline.
The merger of American and US Airways was almost a given, if they were to survive.
“Over the longer term I think there will be just that many more opportunities for customers in Philadelphia to take advantage of the greater breadth of the network that the new American will provide,” says Chuck Shubert of American Airlines.
If approved, the merger will leave only four airlines controlling 70 percent of the U.S. market.
“Consumers end up paying more for airline tickets, in general they have less convenience during mergers – there’s less flights and availability,” says FareCompare.com CEO Rick Seaney.
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.
“My gut says that the Advantage program, American Airlines frequent flyer program will be the one to remain.” says Brian Kelly of ThePointsGuy.com about their frequent flier programs.
It’s expected that frequent flyer miles will be rolled into one program.
“This may actually work out to a lot of people 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,” according to Kelly.
Just don’t expect either airline to do anything right away.
“The transition of this type is going to take a long time. If you take a look at previous mergers, Northwest-Delta, United-Continental, it’s going to take a couple of years,” says Robert Ciminelli of US Airways.
How smoothly the merger will go will hinge a lot on the employees. While industry experts say that labor groups at both airlines seem to be on-board, seven years ago US Airways merged with America West and their pilots and flight attendants still haven’t been integrated. So only time will tell.