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US Airways, American Airlines Officially Announce Merger

(credit: Jim Watson/Getty Images)

(credit: Jim Watson/Getty Images)

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By Jim Melwert

PHILADELPHIA (CBS) - American Airlines and US Airways have formally announced a merger deal that would create the largest airline in the world, based on number of passengers.

The deal still needs federal approval though industry experts expect no problems. The new airline would keep American’s name, but would be led by US Air CEO Doug Parker.

Industry experts say frequent flier miles would be recognized, and it’s still safe to buy tickets on either airline as it will take months to combine operations.

Air travelers have concerns over reduced competition, because four carriers would account for 80-percent of air travel in the U.S. — down from 10 carriers in 2001.

“Yeah, absolutely. Less flights and prices are going up, so this will probably make it even more expensive to fly out of Philly.”

CBS News Aviation and Transportation Safety Analyst Mark Rosenker says the smaller, low-cost carriers could keep the big players honest:

“The JetBlue’s, the Southwest… all of these carriers have an opportunity, clearly, to influence the market.”

But the business traveller coalition says — from a consumer standpoint, they feel this is a bad idea, as the potential dangers of a merger outweigh any benefits.

Also a concern is jobs, as US Airways is the major carrier out of Philadelphia International Airport and it employs over 6,000 people at its Philadelphia hub.

The Nutter Administration has backed the merger, saying it could offer more opportunity to the region.

But groups like the African-American Chamber of Commerce from Pennsylvania, New Jersey and Delaware have said they’ll fight the merger over concerns of how it could affect jobs here.

Mayor Nutter released the following statement on the merger:

“The announced merger of US Airways and American Airlines has the potential to produce a more dynamic airline, a stronger Philadelphia International Airport (PHL) and a stronger Philadelphia region. Increased air service means more opportunities for jobs at the airport and, ultimately, our region. Competitive cities have great airports that are attractive to passengers, businesses and airlines alike.

“As PHL’s primary carrier, US Airways has played a major role in our city’s success competing in the global marketplace. I am eager to learn more details about the proposed merger, and I am optimistic about the possibility of more international air service to Philadelphia. The merger between US Airways and American Airlines provides an opportunity for non-stop flights from PHL to Asia and other international destinations, as well as better connections for other routes around the world.

“I offer my sincere congratulations to Doug Parker, Tom Horton and their respective teams on this great accomplishment, and I look forward to working with the world’s largest airline as it establishes service in the City of Philadelphia.”

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