American Airlines and US Airways Merger

What Should I Know About the American Airlines - US Airways Merger?

American Airlines LogoAlthough the U.S. Department of Justice (DOJ) recently tried to block it, the merger between American Airlines and US Airways is now final and complete, creating the largest airline in the world. Long-predicted in the U.S., this is the last of the big airline mergers, bringing the number of major carriers from nine down to four (Delta, United, American and Southwest).

The DOJ agreed to the merger once the airlines agreed to release some coveted slots or gates at seven major airports, most notably at Washington Reagan Airport and New York’s LaGuardia.

Worried about how this will affect your travel plans? The UNIGLOBE Travel Experts are here to answer your questions.

Will the companies merge immediately and which airline will I be flying with?
While the merger means that the two carriers are now one company, they both stress that they will continue to operate separately until the FAA issues them a single operating certificate (likely late 2015). For the time being, there will be no immediate changes to aircraft, gates and check-in.  As before, continue to check in with the carrier who is operating the flight - which will be listed on your itinerary.  The first changes you will begin to see will revolve around the loyalty programs, and then code-sharing (selling seats on the other’s aircraft).

How will this affect my loyalty program points?
US Airways will leave the Star Alliance and join the Oneworld Alliance (of which American Airlines is a founding member) on March 31, 2014. As of that date, you’ll no longer be able to redeem US Airways points on any Star Alliance carrier (such as United), so if you have plans to do so, make your reservations immediately.  If you hold a ticket on another carrier for travel after March 31 that was made through the US Airways Dividend Miles program, don’t worry – the ticket is still valid and will be honored.

The American and US Airways reward programs are currently separate, but based on previous mergers, expect this to be one of the first areas of integration, offering the ability to earn and use your AAdvantage and Dividend Miles points on the other carrier.  Also, elite status and lounge reciprocity should be introduced between the carriers shortly. So far there have been no announcements on how your points will be affected but expect it to happen sooner rather than later.

On a related note, United and US Airways have long had a codeshare partnership, which will also end March 31, 2014. If you collect United MileagePlus miles, you’ll no longer be able to redeem them for US Airways flights after March 31. However, US Airways flights booked through United prior to that date, for travel after March 31 will still be honored.

Will fares be affected by the merger?
The company’s new leader, Doug Parker states: "In this case, we're putting together two airlines that are highly complementary and not reducing the supply of seats. So nothing about this merger should affect prices."

That’s nice corporate speak, but most people who watch the industry have heard Parker state for years that capacity discipline, through mergers, is the key to returning pricing power to the airlines.  Having said that, as 3 major mergers preceded this one (Delta-Northwest, Southwest-AirTran, United-Continental), much of that airline pricing power already exists so we shouldn’t expect any dramatic pricing changes from this one. We’ll have to wait and see.

The face of U.S. aviation has changed dramatically in the last eight years and now over 80% of the business is now controlled by four airlines.  That may raise the concern of many in the business travel industry, but following a decade of airlines slipping in and out of bankruptcy, this new market reality may provide the stability and predictability that allows travel to flourish.

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