An American -US Air merger- closer [updated]

American Airlines has bowed to pressure from creditors and is exploring merger options, having previously vowed to go it alone. This consideration makes the possibility much more real. Especially with the AA unions being so keen on a merger.

Lots of logic for the move. It would create the second-largest airline in the United States in terms of operating revenue. US Airways plans to adopt the American Airlines name. The unions feel it would protect them.

Not sure what it will do to customer service at the airline. I personally think AA has the worst in the USA (Business Insider said in 2011 that American Airlines is the seventh worst company in the USA!)  Both airlines have very high levels of customer complaints: American 1.44 per 100 000 passengers and US: 1.35 compared with the 1.22 industry average.   USAirways has a slightly better on time performance 83.0% of flights arrive within 15 minutes of schedules arrival time compared to American’s 79.6% (Industry: 80.0%).  The number of passengers who hold confirmed reservations but cannot get on a flight because it is oversold is 0.86 per 10 000 passengers at American and 1.61 at USAirways. As for luggage, American “loses” 3.2 bags per 10 000 passengers compared with 2.53 at USAirways and an industry average of 3.49

The other concern here at Wild about Travel is price. I  imagine on some routes, prices will soar as competition falls.

Such a merger will leave the USA with just three mega legacy carriers:

  • Delta (Skyteam)
  • United (Star)
  • US Airways/ American

Plus a handful of other carriers:

  • Alaska
  • Allegiant
  • Frontier
  • Hawaiian
  • JetBlue
  • Southwest
  • Spirit
  • Sun Country
  • Virgin America

In five years the USA has said goodbye to:  Aloha,  ATA,  Big Sky Airlines, Boston-Maine Airways, Continental, Independence Air, Midwest, Northwest, Skybus (though in fairness this was hello/goodbye), TED and USA3000. Soon AirTran will go. Have I left anyone out?

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  1. US has already let leak a lot of the plans for if a merger went through on their terms (thanks to the union agreements). One thing that a lot of people forget about is that Doug Parker is a Crandall desciple, having been one of the rising stars at AA during that time. So while he is rational, he does have a special place for AA. While the US East pilots are unhappy with US management, they are greatly outnumbered by US West and AA employees who are happy, so there is definitely room for progress.

  2. Listing Southwest as a “smaller/regionals,” really? Southwest already flies more passengers than USAir and AA _combined._

    This merger won’t result in a loss of competition because air travel isn’t competitive today. It is a bunch of overlapping monopolies.

    OTOH, the USAir/AA merger will result in customers in all those USAir cities now being able to fly direct to all those AA destinations in Latin America. That is a tangible benefit. That fact that it will get Doug Parker out from under the “Agony Air” Frankenstein is just an added benefit.

  3. Good point re Southwest. They are indeed #3 in terms of passengers (not quite as big as American/US Combined- but close). I will amend it to Other Carriers

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