With all the rumors about US Airways going out of business, I’ve been worried about the miles I have accumulated over the years in its program. Now it appears that US Airways and America West will be merging. Can I stop worrying about my miles?
In a word: probably.
The very first paragraph of the public statement issued by America West on May 19 promises customers of the new airline (which will be called US Airways) “simplified pricing, international scope, access to low-fare service to over 200 cities across the U.S., Canada, Mexico, the Caribbean, and Europe, and amenities that include a robust frequent flyer program, airport clubs, assigned seating, and First Class cabin service.” While the airlines are still working on the details, the release suggests that the two programs will be linked in the short term, and ultimately merged into a single program.
The intent is clear: Members of both programs eventually will become members of a new program, which will combine the best features of the two current programs. All miles will be preserved, as will members’ elite status.
So if the merger proceeds more or less along the lines agreed to by America West and US Airways, and if the resulting carrier is able to operate profitably, then both existing and future miles earned in US Airways’ Dividend Miles program will enjoy a long, productive life.
Let’s have a look at the four hurdles that the airlines must overcome for that best-case scenario to come to fruition.
First, the merger agreement must be approved by multiple outside sources, including the court overseeing US Airways’ bankruptcy, various regulatory agencies, the Air Transportation Stabilization Board, and America West’s shareholders.
Then there’s the thorny issue of integrating the employees of the two carriers. As an example, consider the pilots. US Airways’ most junior pilots have 19 years seniority, while America West’s have just seven. So the benefits accruing to seniority would fall disproportionately to US Airways’ pilots, even though in the eyes of America West’s pilots, among others, America West is rescuing US Airways from oblivion, and therefore has every right to preserve the status of its own employees. Similar disconnects exist between unions representing the airlines’ other work groups.
Another remote possibility is that another company or group will submit its own bid for US Airways. If the competing bid is successful, we will find ourselves assessing an altogether different plan. Still, if it keeps US Airways flying, in whatever form, it’s likely that any rescue plan would maintain the viability of US Airways miles as well.
Lastly, the new airline must be able to compete in today’s brutal marketplace.
On paper, the new US Airways looks like a winner. Features will include full service and low prices, a comprehensive route network, and a mileage program that puts to shame the programs of Southwest, JetBlue, and other discounters. But no one can guarantee that the reality will be as compelling as the idea.
Still, my best guess is that the new US Airways will survive and prosper, and that US Airways miles will as well. But until the merger is up and running, I’ll be monitoring the situation closely for any signs that the plan is being derailed. I suggest you do the same.