A marriage of two airlines: the USAirways/American Airlines merger

Posted on Posted in Airlines, Philadelphia, PHL Airport

Quite appropriate that the US Airways and American Airlines merger would be announced last week on Valentine’s Day – the marriage (merger) of two single parents (airlines) in a sense.  Sure we should be happy that they found each other but as children (frequent fliers) of each parent, we of course are a bit skeptical of what the blending of our families will look like and who wins in the deal (probably no one).   Where will our blended family live (we like our current homes)?  What if we don’t like each other? We will say goodbye to our twenty six relatives (aunts, uncles, cousins) in the Star Alliance, our international family with such a reach ,  a flair for service, products and perks that we like so much when we visited them. We say hello to a smaller set of relatives in the OneWorld – not quite as international as our Star family – of course with a crazy award uncle who likes to impose “fuel surcharges”. Just like the Brady Bunch, someone is going to be the Jan in all of this.

My one and only American flight was years ago to Los Angeles via Dallas hub – I remember running for the transit to the other terminal and of course who can forget my seatmate – a man from Dallas who chewed and spit tobacco in his spit cup for the entire flight – no pleasant memories as an American customer.  In the Philadelphia area where US Air has 50-60% of the flights, I’d like to hope things stay the same – direct flights without connections and a plethora of time availability.  But as we all know things don’t always stay the same.

While everyone seems to think they know what is going to happen to this or that, one thing is crystal clear, it is going to be about the finances – when you have the same financial goals, the marriage works.  If you have issues with the money discussion, it will get ugly.  To get to the same goals will be the compromise they each need to make – American didn’t end up in bankruptcy for managing its finances well now did it?  New branding may look pretty on the planes but the timing and costs seem crazy to me, especially when in bankruptcy. US on the other hand has sliced and diced everything to get their finances in hand much to chagrin of the flying public – it never said it has to do anything other than get the passenger from point A to point B.  For those of us in Philadelphia, we have dealt with this for so long, we have zero expectation so that we can’t be disappointed but only pleasantly surprised.  An example is when our bags arrive within 1/2 hour!  We are happy to have our bags back in one piece and in under an hour (pleasantly surprised) that we will tell everyone about it and they understand instantly. There is a reason that Auntie Anne’s in baggage claim is always busy  -we no longer get food on flights and have to wait on our bags a might bit longer than most.

So will the pain be felt for the American family of travelers used to nice perks or the US folks stripped down to the basics and not expecting much? Who knows at this point? It’s all speculation but I think the American folks will probably be most affected while the US elites are now going to have to fight for upgrades with a greater pool (think we need a reality show for the fun that ensues when the elites don’t get their upgrades or the lounge is full). Time will tell but with an obligation to shareholders/investors, I don’t see the loyal frequent flier or the regular traveling public winning with this merger.

There will now be three big airlines (American, United and Delta) and with not much choice in most markets now – I’m sure ticket prices are surely to rise with the parsing of services for a price continuing to proliferate.  The supply of seats has shrunk in recent years with full planes going out,  you won’t need an economics class to study the effects of supply and demand, you will see it with every ticket purchased.  You may well see a change in travel patterns emerge as families stay closer to home or drive to their destinations when the price to fly becomes prohibitive for the normal person. It’s just the finance of it all – the geek accountant in me knows how the dance works to get the balance sheet healthy with the blending of increasing revenue (what’s left to charge for?) and cutting expenses  – it will be interesting in the months to come to see how the blended family moves forward. As children, expect tears, tantrums and in the end when we’ve lost the will to fight, complacency as we have with so many other aspects of life – people will say “oh well, that’s how that goes, what are you going to do?”

For me, losing access to the Star Alliance is going to be hard as they have such good coverage of the world I have yet to visit.  I won’t lose my current miles as they move to American but will no longer be diversified in my frequent flier portfolio but overweight OneWorld (due to my BA account).  With higher redemption levels my current miles face an immediate devaluation of their value (once the alliance changes) and this is  before the crazy uncle “fuel charges’ is applied, where applicable.  So now I am scrambling to put a reward puzzle together for my last Star Alliance redemption.  I have a few ideas so let’s see what materializes before I have the fun of calling the USAirways team to redeem my miles for the last time.

How are you handling the USAirways and American Airlines merger news?  Are you looking for your last Star Alliance redemption?  If so, where will you go?



3 thoughts on “A marriage of two airlines: the USAirways/American Airlines merger

  1. Like you, sad to see the Star Alliance go. It was the one really good thing about U.S. Airways. I feel like the OneWorld is really the small world network – as in my world and options just got smaller. Transcontinental flights on OneWorld will be about the same as Star Alliance, but once you get there, your options are few. I’ve been looking at One World within Europe, Africa and Asia – its not a pretty sight. Only time will tell…

  2. I’m a Baby Boomer* and sometimes set in my ways, so the merger represents a change I’m not sure I will like. My biggest disappointment will be if US Airways (or rather, the new American) abandons Philly as an international hub. I am always so happy to get off a plane from Europe and have to deal with a connecting flight to get home.

    * I’m so old I remember when US Airways used to be US Air — or as it was known to most Philadelphians, US Dare.

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