Video SRQ: My Thoughts on the US Airways/American Airlines Merger
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TPG follower Thomas tweeted me this week asking what I think about the upcoming airline merger:
“What are your thoughts about the upcoming US Airways and American Airlines merger? Are your travel patterns and plans changing at all because of it?”
US Airways and American Airlines actually moved one step closer to a merger this week when American agreed to have Citibank as their credit card issuer going forward. This eased Citi’s objections, which could have thrown a big wrench into the plan going forward. Once the agreement was made, the judge sent the plan to the creditors for approval which should take about a month or so before there is a final approval for the merger late this summer.
In terms of my plans, I’m an AAdvantage Executive Platinum member and I’m looking forward to having more routes that I’ll be able to fly and can to bank to my American AAdvantage account and elite status. I’ll also have more options for redemptions because I’ll be able to use my American miles on US Airways flights. Not only that, but I suspect that the new airline’s elite status system will look more like US Airways, with four tiers instead of American’s three.
On the flip side, you US Airways flyers out there are likely to experience bigger, more dramatic changes to your airline experience. Right now you can redeem on Star Alliance partners at some really great rates like 90,000 US miles roundtrip in business class to North Asia. This past winter I used 110,000 US Airways miles to take what would have been an $8,000 flight in business class roundtrip to South Africa – pretty amazing. Unfortunately, I have a feeling that you will no longer be able to do get deals like this because US Airways is probably going to hack away at those really valuable redemptions and adopt an award chart that looks like American’s.
On the positive side, you’ll most likely be able to use your US Airways miles for one-way redemptions, which you can’t do now. American’s website is also drastically better than US Airways’ where you basically have to call and speak to a representative for everything. There are of course going to be positives and negatives for flyers of both airlines, but overall as an American flyer I don’t think I’ll lose much.
One concern I do have is whether after Doug Parker, who is CEO of US Airways, takes over that American will continue all the really great service improvements, including bringing a new fleet of planes online, that American has been working on this past year. While US Airways claims that won’t happen, I’m not sure I wholly believe it.
Right now there are too many things up in the air about the merger still, but I’m not worried about it and I don’t think there’s anything that you should be too concerned with at the moment. Stay tuned because I’ll be keeping up to date with all the upcoming changes and writing about them here as they happen!
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