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Little Change After American, US Air Merger

SmarterTravel

This morning’s biggest airline-industry story was the close, finally, of the American-US Airways merger. But for customers of the two airlines, nothing changes today. And very little changes in the next month.

Fully integrating the merger partners could take as long as two years. And the two airlines so far have committed to very little in the way of a definitive timeline.

So far, the following dates and mileposts have been confirmed:

January 7, 2014

According to American’s announcement earlier today, “Customers will begin to see enhancements to their experience in early January, including the ability to earn and redeem miles when traveling on either American Airlines or US Airways, reciprocal American Admirals Club and US Airways Club benefits, and reciprocal elite recognition.”

March 31, 2014

US Airways has confirmed that this will be the date US Airways joins the oneworld alliance. It has also been confirmed that US Airways’ last day as a Star Alliance partner will be March 30.

Business as Usual

Aside from the above—most of which are, notably, frequent flyer program-related—the airlines are advising travelers that it’s “business as usual”

In the meantime, customers should continue to do business with the airline from which travel was purchased just as they did before the merger. In short, it is “business as usual.” The airlines’ separate websites, aa.com and usairways.com, as well as the two airlines’ reservations systems and loyalty programs, will continue to operate separately until further in the integration process.

Merger Cheat Sheet

  • The new company retains the “American Airlines” name and is based at American’s Ft. Worth headquarters.
  • US Airways chief Doug Parker is the new CEO. American chief Tom Horton is chairman of the new board and will 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 now own around 72 percent of the new company; US Airways shareholders have 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 actual merger won’t happen overnight. 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 may be 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% 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

What are your expectations for the “new” American?

This article originally appeared on FrequentFlier.com.

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