American Airlines and US Airways formally announced a merger on Thursday, creating the world’s largest air carrier. But what does that mean for air travelers?
Changes at National Airport
This particular merger will have a big impact on the Washington area because American and US Airways overlap at just one major spot: Reagan National Airport. The two airlines currently control nearly 68 percent of the flights at National.
The federal government still determines how many flights can be allowed at National, an airport locked in by the Potomac River and Arlington County and unable to physically expand.
Regulators will likely force the newly merged airline to give up some of these slots, William S. Swelbar, a researcher at the MIT International Center for Air Transportation, told The Washington Post’s Ashley Halsey III.
This could mean the loss of some flights but an increase in other airline options. Swelbar said that Southwest and JetBlue would likely want to grab some of these slots.
Frequent Flyer Miles
The airlines both assured travelers on Thursday that until the merger is complete (expected later this year), the separate airlines would continue to maintain their loyalty programs. So, American’s AAdvantage and US Airways Dividend Miles would remain in place, and existing miles will be honored.
In a news release, the companies said that when the merger is approved, “additional information will be provided to customers of our frequent flyer program on any future program updates, including account consolidation or benefit alignment.”
It is expected the combined airline will honor those miles with one combined loyalty program once the merger is completed. But travelers aren’t always happy with what this means for their miles and benefits. After the United/Continental merger, some Continental riders were irked when the joint airline announced that it would let miles expire after 18 months of inactivity.
What About Fares?
Swelbar told The Post that he doesn’t expect the merger to have much impact on fares.
The recent history of airline mergers doesn’t suggest that they lead to higher prices for passengers. A study released in December by PricewaterhouseCoopers said that the recent mergers didn’t cause riders “to experience dramatically higher airfares or drastically reduced competition on most routes.”
(However, rising oil prices could prompt airlines to increase fares. The industry reported last year that higher oil costs significantly lowered profits.)
Service for the Airline and Regional Carriers
The combined airline will have more than 6,700 daily flights to 336 destinations in 56 countries, according to the announcement. In addition, the regional carriers owned by each airline (American’s parent company owns American Eagle; US Airways owns Piedmont and PSA) will continue operations.
What About the Hubs?
The new airline is expected to maintain the hubs now served by US Airways (Charlotte, Philadelphia and Phoenix) and American (Chicago, Dallas/Fort Worth, Los Angeles, Miami and New York). But this could change, given how close some of these hubs are to one another.
The release also noted that the new airline will expand service from these hubs, adding flights to current markets and to new cities.
What does the merger mean to the average passenger? Talk about it in our new transportation forum.
Ashley Halsey III contributed to this report.