American Airlines and US Airways – the two large U.S. legacy carriers – have agreed to merge. According to air travel analyst Rick Seaney, the new mega-airline “will be the world’s largest, based on combined revenue.”
Seaney adds, “Ticket holders have no need to worry, they will be honored and so will your miles.” The deal is expected to close by the third quarter (July-Sept.) of this year. Note: See timeline at the end for how the merger evolved.
Listen to Rick Seaney’s take on the merger, including things you need know – that you won’t hear from the airlines:
American Airlines Retains Name
The new carrier will keep flying under the name American, an iconic global brand that’s been around since 1934. The airline recently freshened its 45 year old logo, which as FareCompare noted includes a stylized U.S. flag image on aircraft tails, the long-time signature look of US Airways planes. As expected, headquarters of the combined carrier will stay put in American’s home base of Dallas (though for now, it will also retain a “significant corporate and operational presence in Phoenix” which is US Airway’s headquarters).
As for leadership, American chief Tom Horton will have what is largely seen as a ceremonial role concentrating on the transition until US Airways head Doug Parker takes over as CEO of the new mega-carrier.
Merger Talk Began with Bankruptcy
The saga of what initially appeared to be an unlikely union began when American Airlines announced it was would reorganize during bankruptcy back late 2011. Within months, potential merger suitors began expressing interest in joining forces with the grand old carrier, most notably US Airways, but the response from American was always the same: not interested.
US Airways Courtship
US Airways persisted. Back in March of 2012, executives with the Arizona-based airline reportedly registered domain names that might come in handy in the event of a merger, including american-usairways.com, usairways-american.com and usandaa.com. Then execs courted American’s pilots, who were known to be unhappy and were widely seen as the force behind thousands of delayed AA flights that disrupted the airline’s fall schedule. The pilots made no secret of their desire to merge with rival US Airways.
As official word of the merger came down, American Airlines pilot Dennis Tajer said he and fellow cockpit crew members were optimistic and excited. “We’re not delusional, though,” added Tajer, “we know the heavy lifting starts now but at least everyone is pointing in the same direction.”
Passengers: Ticket Prices to Rise, Miles Still Good
No immediate changes are expected – there are still some regulatory hoops to jump through – and as Rick Seaney points out, “Anyone holding tickets on either airline has no reason to worry; the tickets will be honored.” Same thing for loyalty program miles: “No airline will risk alienating its best customers, so miles will not be tampered with,” Seaney said, adding, “The combined programs may even prove more valuable for elite members in the long run.” The new airline will stay with American’s current global alliance, Oneworld.
However, the analyst does expect ticket prices to rise mostly because there will be one less carrier in the competitive mix. Travelers will have to shop more carefully than ever to ensure they find the cheapest flights.
Timeline – Merger from Start to Finish
See how the merger story unfolded – click the headline, get the details.
- Nov. 29, 2011 – American Airlines files for bankruptcy
- Feb. 1, 2012 – American Set to Cut 13,000 Jobs
- March 22, 2012 – American Rejects Labor Contracts Amid Merger Rumors
- July 13, 2012 – Five Possible American Merger Partners including US Airways
- Sept. 27, 2012 – American in Turmoil – The View from a Pilot
- Oct. 8, 2012 – American Racks Up 21,000-Plus Delayed Flights in Sept.
- Nov. 5, 2012 – American Apologizes for All Those Delayed/Canceled Flights
- Jan. 7, 2013 – Crunch Time for American – To Merge or Not to Merge?
- Feb. 7, 2013 – What You Need to Know about an American Airlines-US Airways Merger