Thoughts On The American-USAirways Merger

Update: 02/13, It’s on folks.

————————————————————

This was originally posted on 02/06:

It seems that American and USAirways are all but certain to announce merger plans next week.  I sure hope they don’t, but that’s where the arrows are pointing.

What does that mean for you?

My guesses:
-The American brand and AAdvantage program will survive.
-The new airline will be part of OneWorld.
-We will lose a great way to earn Aegean Star Alliance Gold. Mileage Run anyone?
-At some point you will be able to transfer miles back and forth between your AA and USAir accounts. Your miles and lifetime statuses will be 100% safe.
-There will be more short-haul flight destinations for BA awards!
-At some point you will lose the ability to transfer AMEX points to USAirways at a 16% loss.
-While multiple people have been able to duplicate ticket from NYC to South Africa with a stopover in Israel for 40,000 USAirways miles such system issues don’t happen over at AA.
-The ability to route via a 3rd continent that USAirways allows on awards will end. AA doesn’t let you go to Australia via Asia or Asia via Europe. While with USAirways you can fly to Asia via Europe in business class all for just 90K miles.
-The easy to churn Barclay USAirways card will be phased out and harder to churn Citi AA cards will become the sole credit cards for the combined airline.
-There will be a new award chart that is likely less generous than AA’s or USAirways’ current charts.  Though that won’t come until the merger is complete in a couple years.
-USAirways’ Doug Parker will be running the show while AA’s Tom Horton will step aside.
-USAirways still hasn’t fully integrated with America West…should be fun seeing how another airline in the mix will stir that pot.
-Fewer airlines=less capacity=fewer award seats across the board.
-Fewer airlines=less capacity=more expensive airfares across the board.
-USAirways route network adds almost no value to AA’s route network. They have virtually no presence in Africa, Asia, Australia, or South America. This is clearly a merger of the unwanted ones that were left behind at the prom.
-AA has never flown to Tel Aviv due to pension issues that were left behind by TWA. While AA didn’t merge with TWA there were still threats made about seizing their aircraft should they fly to Tel Aviv. Should be interesting to see what happens now. I’d imagine they will try to work something out behind the scenes rather then ending USAirways’ Tel Aviv service, but perhaps they won’t be able to? Assuming they do work things out and continue to fly to Tel Aviv I’d have to imagine that there’s a strong chance they the service switches to AA’s Miami hub instead of Philadelphia.
-Speaking of hubs, it seems unlikely than an airline would keep 4 East coast hubs open. Charlotte, JFK, Miami, and Philadelphia likely can’t all be sustained, though in order to gain regulatory approval look for them to lie and say they will all stay open before they start to downsize one or 2 of them once the merger goes through.  Phoenix also seems redundant between Dallas and Los Angeles.  In other words all of USAirways’ hubs are at risk here.

So what are your guesses?

Tweet about this on TwitterEmail this to someoneShare on Facebook

61 Responses to “Thoughts On The American-USAirways Merger”

  1. gaby Says:
    1

    I always wondered why AA is not doing the NY-TLV route. Intresting stuff Dan
    Airfares will probably go up that is unfortunate.

    ReplyReply
  2. hunch Says:
    2

    Oh no! Will the value/price of USAirways miles go up, or will AA go down?!

    ReplyReply
  3. Traveler Says:
    3

    @dan I am trying to find the old rental car corporate codes list in the archives but I can’t seem to find it. Can you please please post the link on this blog for me? Thanks a million

    ReplyReply
  4. Sal Says:
    4

    So if I have points from AA what will heppen?

    ReplyReply
  5. Yeh Says:
    5

    Is it worth it to try get us airways miles now if i value AA miles as they will combine in the future?

    ReplyReply
  6. M Says:
    6

    Great write up!

    ReplyReply
  7. M Says:
    7

    Can you give details on how to do that 40k Israel SA trip?

    ReplyReply
  8. Yitz Says:
    8

    I guess a silver lining would be ba short haul awards. Now you’d be able to book is airway routes as well for as little as 9k rt. You also have an easy partner one world airline for the aa explorer award…. So not all is bad

    ReplyReply
  9. dave Says:
    9

    will i be able to keep life time aa platinum?

    ReplyReply
  10. yuneeq Says:
    10

    “-Fewer airlines=less capacity=fewer award seats across the board.
    -Fewer airlines=less capacity=more expensive airfares across the board.”

    I don’t agree with that. Fewer airlines doesn’t mean fewer airplanes or less capacity. It could be the end result, but by merging, it doesn’t necessarily mean that they start selling off planes.

    Though there will be less competition, which of course will be bad.

    ReplyReply
  11. Jon Says:
    11

    Miles from both airlines will be safe but it will be harder to use them as more people will be combining accounts. The credit card situation should be interesting. I can’t imagine Barclays just walking away.They will probably have to negotiate some kind of deal with Citibank

    ReplyReply
  12. shmuel Says:
    12

    Why will the method to earn Aegean Star Alliance Gold fall away?

    ReplyReply
  13. Sela Says:
    13

    Don’t forget the legendary bad service of AA will migrate to USAirways!! And the Miami hub is terrible, as is AA’s stranglehold on routes to Latin & South America

    ReplyReply
  14. robi Says:
    14

    time to stock up on US air miles!!

    ReplyReply
  15. Dan is real Says:
    15

    Dan I have roughly 1.2 mill points for AA I’ve been flying for years exclusively with aa.

    Should I liquidate my points?

    What’s the best airline to fly exclusively with?

    ReplyReply
  16. Me Says:
    16

    Will my AA status be matched by US Air?

    ReplyReply
  17. ab Says:
    17

    how will this affect my precious BA miles?!?!?!?!!!?!?!?!?!?

    ReplyReply
  18. monkey Says:
    18

    also, why would they join one world and not the star alliance?

    ReplyReply
  19. Aus Says:
    19

    Any thoughts on us miles transferring to aa miles in order to increase lifetime miles on American?

    ReplyReply
  20. opportunistic Says:
    20

    Is it a good idea to apply for the Barclays Usair card now, and can I 2bm it with the Barclays NFL?

    ReplyReply
  21. john Says:
    21

    Can you currently route via Europe to Australia using US Airways DM or it has to be via Asia?

    ReplyReply
  22. leah c Says:
    22

    Will i still be able to use my american airlines gift cards?

    ReplyReply
  23. goals^n^dreams Says:
    23

    Is is good to apply for US dividend card now or it doesn’t matter? what happens to AA miles and US Div miles accounts? will they be combined into 1 account or not?

    ReplyReply
  24. brooke Says:
    24

    how do ppl book round the world us airway tickets for 40K? do they add segments to their flights after making the innitial milege booking online?

    ReplyReply
  25. mendy Says:
    25

    thanks dan so whats better for me do to now for a biger value transfer my aa to usairways or usairways to aa points?

    ReplyReply
  26. zvi Says:
    26

    Also, with AmEx Platinum you could access USAir lounges even if not flying; I suspect this will change and only AAdmiral lounges will exist.
    Also: what’s the connection between TWA/AA pensions and landing in TLV ?? Even if there were some crazy legal issues, there would be a statute of time limitation.

    ReplyReply
  27. YM Says:
    27

    What will happen with avios? Will it stay the same for domestic flying?

    ReplyReply
  28. Kosher Says:
    28

    US Airways adds to AA:
    significant Southwest US coverage
    Many smaller markets in the Eastern half of the US
    Significant Europe routes from PHL and CLT

    As a US Elite, I am happy that “my” airline will finally go to Asia and increase its South American coverage.

    I think on MIA will be significanly downsized. All the other hubs are making too much money and have distince roles, so they have no reason to downsize them

    ReplyReply
  29. Srulky Says:
    29

    I’m assuming Charlotte will close. Miami will stay open. I think they’ll keep PHI considering they have lots of svc from LGA and EWR. Thank God we still have the OneWorld alliance. I can imagine what it would be like without the BA avios shtickle

    ReplyReply
  30. Srulky Says:
    30

    Speaking of Avios, the AA-US Airways merger means more availability options & routes when booking with Avios!! I’m starting to like this merge…

    ReplyReply
  31. RYAS Says:
    31

    What about using avios miles for AA? What happens now?

    ReplyReply
  32. Jon Says:
    32

    The answeres to all these questions would have to be a guess.Most likely ff miles won’t disappear,but maybe harder to use. It will take several years for it all to happen.

    ReplyReply
  33. bb Says:
    33

    how will this affect BA miles?

    ReplyReply
  34. sfuzzi Says:
    34

    Zvi, I think the issue has to do with American honoring pensions for former Israeli TWA employees. There is something like a $10 million liability. I am guessing if American doesn’t pick up that route, they don’t have to pick up that liability per terms of the TWA acquisition.

    ReplyReply
  35. rob Says:
    35

    @dan, thanks for the analysis. i just looked at the NY-TLV-JNB flight on twitter. crazy for 40k miles. should be 70k. how is that even possible? what could they be pricing it as?
    has anyone you heard of gotten it in biz class for slightly more miles?
    i have gotten lots of crazy usair deals including a deal from israel to asia routing through the us with stopovers both ways for less than the price israel to the us (50k RT)…

    ReplyReply
  36. Dan G Says:
    36

    This will not happen – There is no money for a merger. AA is in bankrputcy, and LCC has little cash for this merger. If it happens, it will need serious financing.
    AA is largely a boeing fleet, US Airways (LCC) is almost completely airbus.
    Charlotte was popular because it’s a fortress airport. As Southwest takes over there, it will reduce service even more.
    Philly vs NY is an interesting argument, but in the end – NYC has higher paying customers, so I would expect that PHL would be a focus city over time. (Similar to CLE was after the UAL/CO merger) PHL is less than 100 miles to NYC. The wait time on the ground is less than the flight time.
    Not sure what happens to PHX either…I’m guessing at a certain point it would shift many flights to LAX.
    The integration of their systems would take generations of equipment to resolve.
    Neither Airline is strong off the North/South American continents, and both rely on their partners to do so.
    I could see a selloff of major assets to BA before I see AA going to LCC. I’m not sure DOJ blocks it this time.

    ReplyReply
  37. Am Says:
    37

    What are possible ramifications of Parker vs. Horton

    ReplyReply
  38. I LOVE FREE STUFF!! Says:
    38

    i know this is a bad deal for the customers, but is there anything good that would come out as well??

    ReplyReply
  39. mendy Says:
    39

    DAN PLS ANSWER

    SO WHAT BETTER FOR MORE VALUE TO TRANSFER FROM A ADVANTIGE TO US AIRWAYS
    OR FROM US AIRWAYS TO A ADVANTAGE?
    THANKS

    ReplyReply
  40. Ari Says:
    40

    will aa miles price go up or down?

    ReplyReply
  41. Yitz Says:
    41

    @mendy:
    Turn off caps youre yelling!
    It depends what type of trip you want where your destination is and if you have the aa or us air credit cards which can sometimes deduct miles of your trip depending on the destination (with aa) or the carrier (usair)

    ReplyReply
  42. mendy Says:
    42

    @Yitz:
    sorry for the caps
    im asking for cash it up,
    im not planing to travel now in future i want to get $ for it which is worth more?

    ReplyReply
  43. Mark Says:
    43

    After they just repainted/branded the planes and their image, do you really think this would happen?

    ReplyReply
  44. Yitz Says:
    44

    @mendy:
    Don’t know but I’d guess AA. Call someone who buys points

    ReplyReply
  45. Mig Says:
    45

    As a formal TWA/AA cabin attendant who is now at another major carrier I would like to comment on your post, TLV will never allow AA to enter TLV AA has been trying for years that is the main reason behind the AA/TWA merger that and CAI among other slots in Mid East countries all AA wanted was landing rights and those countries never wanted AA to begin with let’s be honest here where do you think Contiental and Delta got there slots from if AA wanted to and they did they would of started service to TLV in 2001 when the purchase of TWA was completed

    ReplyReply
  46. Nun Says:
    46

    If there is really some debt claim being made that keeps AA from flying to Tel Aviv, wouldn’t that debt be declared in bankruptcy? Therefore the debt will be resolved.

    ReplyReply
  47. Ryan Says:
    47

    My favourite use of points at the moment is ba on short-haul aa. I book last minute one ways all the time at really good value but because of the distance based chart, if its not a direct aa flight the value decreases. If the merger happens then there will be more domestic flights to use ba points particularly from Toronto where I’m based. Looking forward.

    ReplyReply
  48. scott Says:
    48

    My prediction is that PHL gets pulled down and JFK survives intact.

    CLT will remain largely as it is. CLT is a massive profit center for US and always has been. LOTS of E-S travel through CLT and a lot of mid-atlantic travelers go through CLT. MIA doesn’t make sense for a lot of CLT’s traffic, so I suspect CLT stays mostly as is.

    MIA won’t change an iota.

    ReplyReply
  49. Tolch Says:
    49

    Reb Dan u think after they merge will a good cc offer come out

    ReplyReply
  50. Joey Says:
    50

    One good thing though, you can apply for a USAirways card before they merger and when your USAirways miles will convert to AA Miles which are more valuable to me. (AA Miles sell for 1.6 cents)

    ReplyReply
  51. leah c Says:
    51

    will i still be able to use my aa gift cards to book a flight?

    ReplyReply
  52. gsqu Says:
    52

    Dan – How can I look at booking a flight ny-tlv-jnb. Is it done through the USair website using multi destinations?
    It only shows USair flights???

    ReplyReply
  53. dg Says:
    53

    dan

    please answear some of the questions.

    ReplyReply
  54. roland Says:
    54

    I’m at 900K aa, does anyone think that usairway miles will eventually get moved over to aa and allow me to get million miler? whether they are through cards or flights? any thoughts appreciated.

    ReplyReply
  55. Cindy Says:
    55

    Are there more than one US Airways cards to do a 2/3BM application for. I figured might as well get points now.

    ReplyReply
  56. Marc Says:
    56

    Hate the fact they will go to one world, I liked to be able to use my us miles on united and earn UA miles on us

    ReplyReply
  57. joe Says:
    57

    @joey who buys AA miles for 1.6 ??

    ReplyReply
  58. jj Says:
    58

    Speaking of AA…NICE LOGO/Branding change! Its is about time. The silver bird and tired old AA logo needed to go,,,And I am all for preserving classics. for example, United’s old logo is WAY WAY nicer than morphing Continental’s former one.

    As far as US Airways goes. The days they switched their name from USAir they went downhill.

    ReplyReply
  59. Eric Says:
    59

    @shmuel: On USair, u gt 100% credit on Aegean for the cheapest economy class fares and only 50% credit on these same fare classes when flying other star alliance partners such as United. Once USair is not Star Alliance u lose the best choice for gaining the cheapest Aegean miles 1 for 1.

    ReplyReply
  60. Judy Says:
    60

    How about my tickets for pesach from Israrl w AA thru London? Whatever is booked will stay?

    ReplyReply
  61. DaninSTL Says:
    61

    Interesting about Israel and AA. Didn’t know that.

    I agree on the HUB issue. Just like with TWA the hubs will change. Here in STL it hurt, a lot. I see PHL and PHX gone.

    ReplyReply

Leave a Reply

Please note: Comment moderation is enabled and may delay your comment. There is no need to resubmit your comment.

Current day month ye@r *

Switch to our mobile site