What the American Airlines – US Airways merger means for you

What the American Airlines – US Airways merger means for you

American Airlines and US Airways have finally made it official. The airlines announced their merger last month, a move that will create the largest airline in the US—surpassing even United. The new company will keep the American Airlines name and home, Fort Worth, Texas.

The new airline will be 2.3% larger than United by capacity, and 2.2% larger by traffic, based on 2012 data. US Airways hubs in Philadelphia, Charlotte and Phoenix will join American hubs in Dallas, Miami, Chicago, New York and Los Angeles.

Critics of the merger say that this could mean bad news for travelers. The reduced number of airlines in the market may result in fewer flights and a less competitive fare structure. And as with past mergers, elite travelers may face competition for upgrades or mileage tickets. Technical glitches may also arise as the airlines come together, as we saw during the United/Continental integration last year.

However, the merger could bring benefits to frequent flyers of either airline, from a bigger route network to access to the recent spate of fleet upgrades—from seats to entertainment options—that American has been working on and that we predict will expand to US Airways planes.

Somewhat threatened by the pending merger are US Airways’ main hubs, including Phoenix, which serves as the airline’s current operations base, and Philadelphia. Smaller airlines such as Southwest and JetBlue may move to fill in these gaps.

The new airline will be led by Doug Parker, US Airways’ CEO. Tom Horton of AMR (American Airlines’ parent company) will serve as Chairman of the new airline’s Board of Directors. Parker will assume the additional position of Chairman of the Board after the first annual meeting of shareholders.

The merger is under review, with a hearing scheduled for March 27. The airlines expect to finalize the deal by the end of the year.