Pros and Cons of an American and US Airways Merger
(NEW YORK) -- American Airlines and US Airways still have to convince the Federal Trade Commission that their proposed merger doesn't create a monopoly, but company officials and industry observers seem confident it will go through.
So, if you're a frequent flyer on one, the other, or both, how will this affect you? Well, first of all, even the airlines themselves acknowledge the full merger process will take at least 18 months. So if you're worried about your frequent flyer miles, you have a year and a half to burn through them. In fact, while the two airlines are in the process of smushing themselves into one, you may well be able to use each airline's miles on the other. That's what Continental and United did when they merged.
All in all, travel experts say miles-holders usually "fare" fine in these situations -- pardon the pun. But there are upsides and downsides to everything. Here are some of the main ones.
1. More places to go. The new airline, which will be called American, promises to make 6,700 flights a day on 600 planes to 336 cities in 56 countries! US Airways and American say they currently only have about a dozen truly redundant routes. If you have miles now on either airline, you'll be able to use them on the new airline to go to all these new places.
2. Nicer aircraft. American has been pushing and publicizing nice amenities like more seats that lie flat, personal in-flight entertainment systems, worldwide Wi-Fi and more seating where you can pay to get 4 to 6 more inches for your poor knees. American has made a big a hubbub about all this, and the new airline is being branded as American, so it's likely you'll see more of these features.
3. Possible Perks. American serves more meals in flight on shorter runs and lets you use miles to book one-way seats. On the other hand, US Airways is known for its enticing frequent flyer redemption rates, such as just 90,000 miles to fly business class to parts of Asia and 110,000 miles to Australia and South Africa. Many analysts fear these goodies will go away. But I view it differently. YOU, as interested flyers, have 12 to 18 months to lobby the new airline to keep the best of BOTH. Email and tweet your desires and demands and see what you can accomplish!
1. Fewer partner airlines. Nobody tracks frequent flyer mile programs as obsessively as Brian Kelly of ThePointsGuy.com. Kelly's intel is that the newly merged airline will choose to be a part of the OneWorld alliance, of which American is currently a member, and not the Star Alliance, with which US Airways has long been affiliated. "That means it will go from having 27 partners down to just 11," Kelly says. "But that still includes great partners like British Airways, Cathay Pacific and Qantas."
2. Potentially higher fares. In a conference call, the leaders of the new "Franken-airline" swore up and down that their marriage will bring fares down, not up. They argue that as a single, more robust airline they'll be better able to compete with the other big guys. However, fewer players traditionally mean higher prices. Classic supply and demand. So we'll see.
3. More customer competition. When any two airlines merge, there are more top-level flyers under one roof, whether they're called "elite" or "platinum." That means competition for free seats and upgrades could be ratcheted up.
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