Earlier this week, it was reported that the CEO of bankrupt American Airlines said the carrier will move ahead and start evaluating potential merger partners. Until now, most of the merger talk focused on a single candidate – US Airways – a ‘marriage’ that air travel analyst Rick Seaney has called, “a potential powerhouse“. But four other carriers are also being mentioned as possible partners for American.
Listen as analyst Rick Seaney explores the latest twists and turns of this merger plotline:
US Airways Still Likeliest Candidate
US Airways is still seen by many as far and away the best fit; as the AP notes, the two airlines have “somewhat complementary route networks”. Beyond that, US Airways CEO Doug Parker has been courting American’s unions and otherwise aggressively pushing for a merger almost from the moment AA declared bankruptcy.
Possible Partners? Alaska, Frontier, JetBlue, Virgin America
Now Reuters reports that AA is considering four other airlines – with AA in the role of ‘acquirer’ – and these include Alaska, Frontier, JetBlue and Virgin America. However, analysts say there are roadblocks to such unions, not the least of them being that the four carriers in question are too small to make American an effective competitor to recently merged powerhouses like Delta (Northwest) and United (Continental).
What a Merger will Mean for Passengers
What would a merged American – if indeed it happens – mean for its passengers? Generally speaking, mergers mean less competition, and less competition means higher airline ticket prices. But as analyst Seaney has said, “Newly-minted airlines that emerge from bankruptcy and/or merger-mania are healthier and you can’t argue with that.” He added, “Airlines too broke to fly don’t get us anywhere.”