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american airlines new liveryAfter months of rumors and speculation, American Airlines and US Airways officially declared yesterday that the two carriers plan to merge into the country’s largest airline.

It’s the latest of several merger announcements over the past few years in an airline industry that continues to contract. Delta and Northwest joined forces in 2008, and United absorbed Continental in 2010. After American Airlines and US Airways become a single carrier, to be named American, the U.S. will be left with only three major legacy carriers. And don’t forget Southwest Airlines, which is currently in the process of assimilating AirTran’s flights and services after their merger in 2011.

Does Your Flight Attendant Hate You?

Airline mergers typically lead to less competition, higher fares and plenty of glitches as the carriers try to integrate two different operating systems. (Remember the computer problems that stranded some United fliers last year?) Elite fliers will also want to keep a close eye on their miles to be sure they’re credited correctly when the two programs are integrated.

How do you feel about the American/US Airways merger — excited? Worried? Indifferent? Post your thoughts in the comments below.

— written by Sarah Schlichter

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One Response to “American Airlines – US Airways Merger: What’s Your Take?”

  1. Chuck says:

    The AA/US merger will be good for people in the upper Midwest. Currently, AA service out of the O’Hare hub to the Southeast and Florida isn’t that great. There are a number of cities that US serves that AA doesn’t, or that AA requires a connection in DFW.

    Being able to fly to Charlotte and then connect to make AA more competative against Delta and its mega hub at Atlanta.

    Further, AA’s service to the major Florida cities, other than Miamia, is a fraction of its Florida service out of DFW. By offering connections at Charlotte, the combined AA will offer more possibilities for Florida-bound travelers from the uppper Midwest.

    While no one likes higher fares, the truth is that when any industry has too many competitors, they often price their products too low to maintain sustainable profits, in the name of maintaining market share. Fewer competitors means higher prices, but they are also profitable, meaning reinvesting in the business.

    The question that everyone wants answered is whether AA’s service will become more like that of US? A friend of mine is an AA pilot. In the discussions between US management and the unions, the point was made that US’s in-flight product is inferior to that of AA. Doug Parker pointed out that AA has far more premium traffic than US, and that it had incentive to provide a higher level of service, especially in the front cabins. The plan is for the combined carrier to maintain AA’s level of service and its current plans for improvements. Otherwise the combined carrier will see its premium traffic defect to United and Delta.

    Obviously, we’ll know for sure in a few years. But, Doug Parker got his start at AA, and I think he knows that the CEO at the time, Bob Crandall, understood the need to cater to road warriors who often pay premium ticket prices.

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