American-USAirways Merger Finalized

Update 12/09/13: The merger has been finalized.
Estimated key dates (subject to change):
01/07/14: Earn and redeem miles between both airlines. Lounge and elite status reciprocity.
03/30/14: USAirways’ final day as part of the Star Alliance (Last day to redeem United miles for travel on USAirways and vice versa for travel through February 2015).  United lounge reciprocity will also end on this day.
03/31/14: USAirways’ first day as part of the OneWorld Alliance. (First day to redeem BA Avios for travel on USAirways. Lots of additional 4.5K award routes in the Northeast corridor.)
——————————————————————
Originally posted on 11/12/13:

The DoJ has settled and will not oppose American from merging with USAirways. The merger is expected to close in December though the USAirways brand will still remain separate well into 2014.

What does that mean for you?

1. Less competition means higher airfares for consumers. Sure Southwest and JetBlue may pickup a few slots/gates being vacated by the new American but those are hardly cheap carriers anymore. They offer more frills than the network carriers.

2. The Star Alliance loses a key partner as the American brand and AAdvantage program will survive in the OneWorld alliance.  USAirways has a strong east coast presence and great domestic first class availability.  They are also a great option for flights to Israel.  USAirways will exit the Star Alliance on a yet to be determined date in the first few months of 2014.

3. The USAirways program with its generous award chart and all of its generous routing rules will be swallowed by American’s program.
-American has very strict routing rules, they don’t allow you to fly to Asia via Europe or to Australia via Asia or Europe. USAirways allows you to fly pretty much anywhere via anywhere so that it’s possible to fly to Asia via Tel Aviv for just 60K in coach or 90K in business with no fuel surcharges.
-USAirways doesn’t require an award ticket to be on a published paid fare routing while American does.
-USAirways doesn’t have a maximum amount of miles you can travel while American does.
-USAirways allows a free stopover anywhere while American only allows it at the North American gateway city.
-USAirways agents also aren’t very good at geography-at least 2 DD readers have booked tickets to Johannesburg via Tel Aviv and were charged only the amount needed to fly to the Hawaii.
-We’ll also lose 35K round-trip off coach peak awards to Europe and South America, 25K off peak awards to the Caribbean, and 60K off-peak business awards to South America.
-USAirways doesn’t charge fuel surcharges while American levies heavy fuel surcharges for travel on British Airways.

-On the positive side American does allow one-way awards and even gives a free stopover at the North American gateway.

4.  American currently has 2 award charts, a region-based award chart good for all partners and a distance based OneWorld chart.  Both offer very good values and are ripe for a devaluation.  Expect one as soon as a combined program is announced.

5. There will likely be a period of time where you can transfer miles back and forth between USAirways and American while they both still have their current generous award charts.  Take advantage of this while you can.

6. DansDeals broke the news back in January that ANA had stopped collecting a fuel surcharge for travel on United and USAirways. That post has lots of info on their program.
They have an awesome award chart (38K miles to Europe, 60K to Israel, etc) and allow 4 free stopovers and it really stings to lose the USAirways option though at least there’s still United.
Same story with Singapore as I wrote about here. If you have those miles you’ll be losing a valuable surcharge-free partner though United remains an option and of course those miles are awesome for redeeming on Singapore business, first, and suites class.
Lufthansa charges a fuel surcharge on most airlines except for USAirways, so you may want to redeem those miles for travel on USAirways before they leave the Star Alliance. I wrote about their program in this post about Barclacards. There’s no fuel surcharge on United tickets within the western Hemisphere but once you cross the ocean Lufthansa charges a fuel surcharge to travel on United.  Still they have some bargains left for transcon and Hawaii flights, especially in business class.
-Note that United miles aren’t affected nearly as much as these program as they never collect a fuel surcharge for award travel. In fact once USAirways is gone they are one of the only carriers that can still say that.

7. The easiest way to earn what can possibly be a lifetime of Star Alliance Gold elite status is going away.  I wrote about Aegean Star Alliance gold status in this post. Now the Aegean gold program isn’t changing but Aegean doesn’t credit miles or only gives partial credit for cheap airfares on most airlines. USAirways is the one exception where you can almost always receive full mileage credit with Aegean, even on deeply discounted airfare rates.
Star Gold gets you and all of your companions 1, 2, or 3 extra free bags and free lounge access at some 1,000 affiliated lounges worldwide when flying on the Star Alliance. In fact Aegean Star Gold even gives free United domestic lounge access-something that United Star Gold doesn’t even offer to their own elite members.

8. You can transfer Starpoints to anyone’s USAirways account, the names don’t have to match. American requires that the names match.
Though you can still transfer Starpoints to another Starpoint account with the same address on file.
Both offer 25,000 miles for every 20,000 Starpoints transferred.

9. American is effectively banned from flying to Israel thanks to leftover TWA pension obligations. If they fly a plane to Israel it would likely be repossessed by those who feel that American assumed TWA’s liabilities and owe them lots of money with interest.
They are trying to settle those issues but if they don’t we may see the end of the USAirways flight from Philadelphia to Tel Aviv.
If they do work out those issues expect American to shift the flight from Philadelphia to JFK and/or Miami.
Beware that El Al may decide to sever its relationship with American if they become a competitor and you may no longer be able to use American miles on El Al. Though if El Al would do that they would lose codeshare access to other US cities that they get from American though they can always set one up with an airline like JetBlue.

10. Operating hubs or major operations in Charlotte, JFK, LGA, Miami, Philadelphia, and Washington DC simply can’t be sustained. There will be cutbacks in capacity and hub downgrades which will lead to higher airfares and fewer award seats.
Phoenix also seems redundant between Dallas and Los Angeles.

11. Bright side: There will be many more flights that you can use your BA Avios for thanks to the USAirways network joining American. So good news for fans of those BA short-haul awards.

Those are my thoughts. What are yours?

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68 Responses to “American-USAirways Merger Finalized”

  1. I LOVE DAN Says:
    1

    what does this mean for people who bought the us airways steal in the summer and are flying in January in regards to transfering the miles to united

    ReplyReply
  2. wolfie Says:
    2

    Justice must be truly blind if DOJ can allow this merger. Frankly, this was true already when NWA disappeared.

    ReplyReply
  3. JohnnieD Says:
    3

    Your last point is the only upside I see….

    ReplyReply
  4. Hamburg Says:
    4

    Hi dan thanks for the info . Are you sure that us airways miles will become american ?

    ReplyReply
  5. Dan Says:
    5

    @I LOVE DAN:
    The exact date when they will be leaving the Star Alliance is unknown.

    @wolfie:
    They shouldn’t have let Delta and Northwest combine.
    They shouldn’t have let Continental and United combine.
    But now that they did they were under too much pressure to allow American and USAirways to combine.

    Really stinks.

    @JohnnieD:
    Yup 🙁

    @Hamburg:
    If I wasn’t I wouldn’t have said that.

    ReplyReply
  6. Rip Says:
    6

    Should i sell my United, usairways or aa miles now to avoid losing money?

    ReplyReply
  7. Yankees Says:
    7

    Dan, when do you think Barclay’s stop offering the US Airways CC?

    ReplyReply
  8. Dan Says:
    8

    @Rip:
    Who knows. As airfares climb by default miles are worth more.
    Then again as they print more miles they devalue their charts making them worth less.

    @Yankees:
    No idea.

    ReplyReply
  9. Pghtown Says:
    9

    This stinks. Star Alliance offered the most options to fly to Israel. Now I am stuck with all these USAirways miles with fewer and costlier options to Israel on points

    ReplyReply
  10. Mark Says:
    10

    Starting to feel like Israel with all these points becoming less valuable…..

    ReplyReply
  11. david Says:
    11

    Thanks for the exhaustive post.
    Will the credit cards work the same way? Will the US airways card & it’s perks go away, leaving only the citi aadvantage cards?
    Thanks.

    ReplyReply
  12. Yehoshua Says:
    12

    A friend (who is a US Airways Chairman member) told me some info about US Air and TLV. She said that since Teva (the Israeli drug company) uses US Air exclusively, US Air makes money even if they fly a plane with no passengers on it to/from TLV. She flies PHL-TLV quite frequently (7+ times/year) and is confident based on the people at US Air she’s spoken to that the new American will continue to fly to TLV. As for keeping the flight from PHL she’s not to sure.

    Hopefully she’s correct.

    ReplyReply
  13. Daniel Says:
    13

    Do you need ANA miles in your account in order to check for partner flights?

    ReplyReply
  14. bubble347 Says:
    14

    Hey Dan, thanks for the post.
    Do you think there is a possibility that ElAl now tries to join the star alliance?

    ReplyReply
  15. ben Says:
    15

    Dan do you think its worth stocking up on (buying) Avios Points?

    ReplyReply
  16. Yosef B Chicago Says:
    16

    So this will in no way affect the BA avios – AA flight by distance option ?

    ReplyReply
  17. Dan Says:
    17

    @Pghtown:
    Well you will have El Al.

    @david:
    Probably.

    @Yehoshua:
    Don’t buy it.
    First of all even the greatest corp contract can’t make a longhaul like that profitable.
    Second they have major issues to work out. I think they will work them out but if it were that simple then AA would have added JFK-TLV 12 years ago.

    @Daniel:
    There are workarounds, see DDF.
    Or just search United or Aeroplan for Star Alliance awards.

    @bubble347:
    No, they’re far too incompetent.

    @ben:
    I’d imagine their value should go up now. Though they can always devalue so don’t buy for long-term needs.

    @Yosef B Chicago:
    No.

    ReplyReply
  18. dave Says:
    18

    dan
    will my life time platinum status on aa remain intact?

    ReplyReply
  19. Dan Says:
    19

    @dave:
    Yes.

    ReplyReply
  20. ben Says:
    20

    thanks Dan

    ReplyReply
  21. get the point Says:
    21

    Dan. what more can you report pls on the effect it will have on united miles programs. it will loose much capability to fly business direct to TLV, as united never has saver points to TLV. with the lost of PHL (had many seats open) it will only be redeemable through a stop in europe. BTW, economy class is also hard to find in united non stop with saver. tks

    ReplyReply
  22. Dan Says:
    22

    @get the point:
    There’s still Air Canada via Toronto with lots of open seats.

    And United opens tons of availability within 24 hours of their own flights.

    ReplyReply
  23. Robert Says:
    23

    Will ua definitely go down in value?

    ReplyReply
  24. Apple Says:
    24

    for AA people, what do we lose, in short?
    long… post

    ReplyReply
  25. Avi Says:
    25

    Are there any CC deals to grab for either airline before they start disappearing?

    ReplyReply
  26. Philly-TLV Says:
    26

    for all of those who bought those mistaken fares ending in Toronto from to TLV–If the merger happens in December, are we still good to go?

    ReplyReply
  27. scott Says:
    27

    I’m surprised how you set up bullet #10, by noting at the end that PHX “seems redundant.”

    From my perspective, of all the hubs in the combined AA/US network, PHX absolutely has the most to lose. They instantly become non-strategic and redundant. DFW and LAX are both perfectly positioned for strategic reasons. PHX has worked well for US, but if they marry up with AA, you can count on PHX taking a massive hit. CLT will remain virtually unscathed.

    ReplyReply
  28. Dan Says:
    28

    @Robert:
    It may but little to do because of this.

    @Apple:
    The award chart will be devalued when the mileage programs are combined.

    @Avi:
    http://www.dansdeals.com/archives/30687

    @Philly-TLV:
    Of course.

    @scott:
    I’m not convinced PHL and CLT will be left unscathed. That’s an awful lot of east coast hubs.

    But yes, PHX will lose many flights.

    ReplyReply
  29. Rob Says:
    29

    US has been very successful having its shuttle in the Northeast – I can certainly see the new airline expanding that frequent-shuttle idea up and down the heavily populated east coast BOS-NYC-PHL-WAS-CLT-MIA

    I think PHL will take a hit on its international service, but not so much domestic – PHL is just too large a market (6th largest in the US) and Charlotte too big a financial center (only NYC is larger in the US) to cut service back from there too much.

    I think PHX is by far the most expendable

    ReplyReply
  30. dov Says:
    30

    still time to do the aegean on usairways? we booked the $468 flights to israel for January. that should get me half way to gold?

    ReplyReply
  31. M Says:
    31

    I have miles with UNITED, AA, BA, DELTA and want to go mid december nyc-tlv-nyc

    which one would have availability, and best to use now before things get worse?

    ReplyReply
  32. EricTheRed Says:
    32

    We should be OK for the short term on the mistaken fares to Israel and the Aegean hack:

    From USA Today:

    http://www.usatoday.com/story/todayinthesky/2013/11/12/merger-whats-next-for-aa-us-airways-customers/3508817/

    But customers of US Airways will soon see one significant change. US Airways has been a member of the Star Alliance frequent-flier program, but the “new” American will stay with the oneworld alliance that American is already part of.

    RELATED: US Airways promises ‘quick’ exit from Star Alliance

    For US Airways frequent-fliers, that means they’ll soon lose their ability to earn or redeem miles on Star Alliance partners like Lufthansa, All Nippon Airways, Air Canada and Thai Airways. But once US Airways shift to oneworld, its frequent-flier members will get access to new partners that include British Airways, Cathay Pacific, LAN, Qatar Airways and Qantas.

    US Airways President Scott Kirby said on Tuesday that US Airways is aiming for a “quick” exit from Star, and that the transition to oneworld would begin during the first quarter of 2014.

    ReplyReply
  33. get the point Says:
    33

    air canada i can agree but United last minute options you need to pay $75 (for people that didnt attend the seminar) and they still dont open business class last minute. tks

    ReplyReply
  34. bob Says:
    34

    How can one avoid the United $75 close in fee? I don’t live anywhere near any of the seminar locations so I can never go to find out

    ReplyReply
  35. Dan Says:
    35

    @Rob:
    I think all of USAirways hubs see losses. DCA forced and the the other 3 will definitely shrink.

    @dov:
    I’d imagine that January is safe.

    @bob:
    There were at least 2 dozen people that came in from out of CLE for the past seminar.

    ReplyReply
  36. Freddie Says:
    36

    You mean the “avoid-the-United-close-in-fee” trick was a DDS exclusive?

    Ok, now it was worth the 20$ in tolls and the $40 in gas. Beautiful!

    ReplyReply
  37. Dan Says:
    37

    Lol.

    ReplyReply
  38. Risue Says:
    38

    Once US Airways is out of the star alliance is the only way to get Aegean gold status by flying Aegean since United Miles are often not recognized in certain classes & never get 1:1 value as do US airways miles?

    ReplyReply
  39. Mu Says:
    39

    Bob, you got to pay for such tips.

    ReplyReply
  40. Anonymous Says:
    40

    Adios service to TLV. AA is effectively banned from TLV due to outstanding non-payment issues from TW.

    You can count on CLT remaining 95% intact. No other AA station offers this vital N-S connection point. And, CLT has been, by far, US’s lowest cost and most profitable hub by a significant margin. I predict PHL takes a 20% reduction in total activities. PHX -40% within 3 years.

    ReplyReply
  41. Maury Says:
    41

    Have you ever booked a North Asia business class for 90k via Israel? From the US, do you recommend booking the flight first to Israel or to North Asia first to get US Air to price at 90k? Thank you

    ReplyReply
  42. DAVID Says:
    42

    @dan
    i fly to hong kong via cathay with american miles now that there is a merger how will this affect me?
    1. Booking future flights – Which program has the easiest miles to use for Cathay after american miles disappear?
    2. If i book a few flights on american airlines now for cathay flights for the next year will i be able to change later on after they cut ties?

    ReplyReply
  43. yehuda Says:
    43

    will my mileage plus miles lose value?
    also if i flew a few times this year using star alliance, which mileage is the best to get me to gold fastest? 2 were tlv flights and the others were domestic.

    ReplyReply
  44. yehuda Says:
    44

    @yehuda: i meant which mileage program should i sign up for?

    ReplyReply
  45. Moshe Says:
    45

    Can I still get the us airline CC?

    ReplyReply
  46. mjd612 Says:
    46

    does this mean starwood becomes more valuable in the fact that in transfers to any us airways account which can used for american?

    ReplyReply
  47. MeirS Says:
    47

    @Moshe:
    I just did, although I assume it will be gone soon.

    @Dan
    What does it mean on the USairways website that you will still be able to earn miles on aegean?
    ”We plan to continue relationships with the following airlines, which means you’ll be able to earn miles on these select partners even after we’ve exited Star Alliance: Aegean, Air China, Air New Zealand, Avianca, Ethiopian Airlines, Eva, Shenzhen Airlines, Singapore Airlines, South African Airways, TAM, TAP and Turkish Airways.”

    ReplyReply
  48. Mendel Says:
    48

    Thanks Dan! When can we check back for all the new short haul routes?

    ReplyReply
  49. Dan Says:
    49

    @MeirS:
    Interesting.
    Guess we’ll know in due time.
    Not sure if they will earn elite miles, if that will only be in the USAir program and not the AA program, etc.

    @Mendel:
    Read the post update.

    ReplyReply
  50. Freddie Says:
    50

    Hey, what about some FP exposure for my analysis of their photo?

    ReplyReply
  51. Joseph Says:
    51

    Did anyone get a notice from American Express that due to the merger AA Admirals club will be removed from the platinum card lounges?

    ReplyReply
  52. Moshe Says:
    52

    Thanks just did 2
    both instantly approved (second barclays)

    ReplyReply
  53. Mendel Says:
    53

    Any specific routes? Like you used to make a post “all routes ex-nyc” etc.

    ReplyReply
  54. Mark Says:
    54

    How much will the PHL-TLV flight be? Will they charge for fuel?

    ReplyReply
  55. J Says:
    55

    HI Dan.. not sure if you saw the news but access to AA and US Airways lounges for Platinum Cardmembers will cease as of 3/22/2014

    ReplyReply
  56. Yossi K Says:
    56

    DAN do you know if i can get a good price anywhere for a ticket to isreal this week for about a week ?

    Apologies for wrong thread

    ReplyReply
  57. moshe Says:
    57

    so can we begin looking at US for flights with BA avios? is the BA site updated? its a terrible site as is

    ReplyReply
  58. tom Says:
    58

    @bob @dan know if there are any star alliance partners without a close-in fee?

    ReplyReply
  59. yitz Says:
    59

    “USAirways allows you to fly pretty much anywhere via anywhere so that it’s possible to fly to Asia via Tel Aviv for just 60K in coach or 90K in business with no fuel surcharges”

    Can someone explain how??
    TY

    ReplyReply
  60. Big Boy Says:
    60

    Does anyone know when US miles will be transferable to AA?

    ReplyReply
  61. היברו Says:
    61

    אני חושב שכן יש צד טוב בזה למי שיש
    לו הרבה מייל’ס של יו-אס אירויס שעד עכשיו היה שוה רק .50 עכשיו יהיה שוה הרבה יותר בערך 1.4

    ReplyReply
  62. Dan Says:
    62

    @Freddie:
    Lol.
    DDF exclusive.

    @Mendel:
    When the time comes I’ll update that post.

    @Mark:
    90K coach, 135K business.
    No fuel surcharge.

    @tom:
    Most don’t.

    @yitz:
    Call to book partner awards.

    @Big Boy:
    If they are sometime next year.

    @היברו:
    USAir is worth wayyy more than .5 cpm and AA is worth more than 1.4 cpm.

    ReplyReply
  63. היברו Says:
    63

    @Dan:this is the price by AH Exchange

    ReplyReply
  64. Dan Says:
    64

    @היברו:
    You can do better.
    Heck you can do better using them in coach yourself.

    ReplyReply
  65. Big Boy Says:
    65

    Do you really think there is a chance that it won’t transfer?

    ReplyReply
  66. chaim Says:
    66

    He’s paying .5 and and people are taking it because no on else is buying. I know, because I made half a dozen calls. I did the bonus transfer and paid the fee and now I’m sitting on miles that aren’t even worth skypesos. Not planing on flying anytime soon so I’ll probably have to eat the loss. Anyone who wants to make a killing now is probably a great time to enter the market.

    ReplyReply
  67. Andrew Says:
    67

    Has US Air said what will happen to their miles? Is it a total waste to open the US Air Barclays card now? or will those points eventually transfer into AA?

    ReplyReply
  68. c cook Says:
    68

    stop crying and buy the stocks making a killing aal

    ReplyReply

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