Advertisement
Consumers Oppose American Merger (If They Care at All)

The Department of Justice claims to be representing the best interests of consumers in its antitrust lawsuit to block the merger between American and US Airways.

According to a just-completed survey by Skift, an online travel publication, the DOJ has it at least partly right: More consumers oppose the merger than support it. But it turns out there's an even larger group of consumers who neither support nor oppose the merger. They just don't care, one way or the other.

Advertisement

Here are the results of the Skift poll:

  • 45.7% have no opinion
  • 23.8% oppose the merger
  • 23.4% haven't heard of it
  • 7.2% favor the merger

The results reflect the opinions of 1,505 respondents, who are Internet users but not necessarily travelers. In fact, the high percentage of respondents with either no knowledge of or opinion regarding the merger strongly suggests a high concentration of non-travelers and infrequent travelers among the survey-takers.

Which leaves us with the opinions of those who would be most affected by the merger, those who are engaged enough to have an opinion on the matter. In spite of the efforts of American and US Airways to win over the traveling public, a meager 7.2 percent are in favor of the merger. And although the DOJ has made no corresponding effort to make its case to the public, more than three times that number oppose it.

If no agreement is reached between the airlines and the DOJ before then, the trial will begin on November 25. Presumably the judge will base her decision on the strength of the two sides' arguments, not on popular opinion. Consumers can only hope that the Justice Department is successful in representing the interests of the public. Those members of the public who care enough to have an interest, that is.
Merger Cheat Sheet

  • The new company would retain the "American Airlines" name and be based at American's Ft. Worth headquarters.
  • US Airways chief Doug Parker will be the new CEO. American chief Tom Horton will be named chairman of the new board and remain in that position until the spring of 2014 when the company's first annual shareholder meeting will be held. When Horton departs the board, Parker will assume his position as chairman.
  • American's creditors would own around 72 percent of the new company; US Airways shareholders would get the rest.
  • Based on 2012 results, the new company would have generated $38.7 billion in revenue.
  • The merger is expected to generate around $1 billion in combined extra revenue and cost savings for the new company.
  • The new company will be valued at around $11 billion.
  • Combining the third- and fifth-largest U.S. carriers will create the world's largest airline, in terms of passenger traffic.
  • Prior to any post-merger rationalization, the two airlines will have around 120,000 employees, 950 planes, 6,500 daily flights, and eight major hubs (American: Dallas, Miami, Chicago, Los Angeles, New York; US Airways: Phoenix, Philadelphia, Charlotte). Although the carriers promise to maintain all current hubs, Phoenix and Philadelphia are likely to be downsized in the post-merger "rationalization."
  • The new American will be a member of the oneworld alliance, not the Star Alliance.
  • The merger is subject to review and approval by U.S. regulators. That wasn't expected to be a problem since there is relatively little overlap between the two airlines' networks.
  • The actual merger won't happen overnight. United and Delta required five and seven months respectively to secure the necessary approvals for their mergers.
  • It was 22 months after their merger closed before United and Continental finally merged their frequent flyer programs. Expect a similar post-close interval before American and US Airways consolidate their programs.
  • Comparisons between American and US Airways' current mileage programs are probably moot since there's a high likelihood that an entirely new revenue-based program (like Southwest's) will be introduced to replace both programs.
  • After the merger, 83 percent of U.S. domestic air traffic will be in the hands of just four airlines (American 26 percent, United 19.3 percent, Delta 19.2 percent, Southwest 17.3 percent).

Reader Reality Check

How would you have voted in the Skift survey: yea, nay, don't know, or don't care?

This article originally appeared on FrequentFlier.com.

You Might Also Like:

Read comments or add your own insight!
Please enable JavaScript to properly view and use this web site.