Merger expected to improve choice for American customers on both coasts

Posted Wednesday, Feb. 13, 2013  comments  Print Reprints
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In recent years, Brett Snyder has lamented the absence of American Airlines in Long Beach, Calif.

At one time, the Southern California native could fly from Long Beach to DFW Airport and head almost anywhere in the world. Later, he could come home to his local airport -- a hop, skip and a jump from his beach town home. But then American ended its flights into Long Beach, leaving Snyder with fewer options.

That's why Snyder, like hundreds of other passengers around the country, may have reason to cheer for a merger of American Airlines and US Airways.

The combination is likely to open up dozens of east and west coast destinations, such as Long Beach and Burbank, which are served now by US Airways but not by American, analysts say.

Interactive: Ten questions about the new American Airlines

Interactive: Timeline of a merger

And more passengers would likely connect through Dallas/Fort Worth Airport, headed to other U.S. destinations or across the oceans to international cities.

"People are going to get to go to more places,'' said Snyder, who runs the CrankyFlier.com blog. "There should be more destinations within the American network for sure."

With close to 100,000 employees, 1,500 aircraft and $38.7 billion in revenue combined, a marriage of American and US Airways would once again make Fort Worth home to the world's largest airline. American, once the No. 1 carrier, was passed up when United Airlines merged with Continental and Delta Air Lines merged with Northwest.

Some downsides for travelers may emerge, analysts said. Higher fares could result in some markets, though today's inflation-adjusted domestic fares are a lot lower than they were in 2000, said George Hobica, president of Airfarewatchdog.Since competition drives cheaper airline prices, taking one competitor out of the mix could drive up fares, agreed Rick Seaney, CEO and co-founder of Dallas-based FareCompare.

"The only good news is that if airlines get too frisky with higher prices, consumers will let them know quickly by cutting back on air travel," Seaney said.The priciest fares will occur at "fortress hubs," including Houston and Charlotte, analysts said. And plan to see fare jumps on routes where American and US Airways have overlapping nonstop service: such as Philadelphia to DFW or Miami, Charlotte to Miami and DFW, and Phoenix to Miami.

But Snyder believes that higher-than-average fares would be limited to few cities.

"There are very few markets where they (American and US Airways) today have overlapping services,'' he said. "They operate pretty independently from each other."

The merger also is sparking speculation that United Continental or Delta may seek to merge with smaller carriers to climb back on top, Hobica said. So, for example, might United consider acquiring Frontier or Alaska?

"Anything is possible,'' Hobica said.

The other guessing game, Snyder said, is what culture will emerge at the new American.

US Airways, which is run by the former America West managers, is a "no-frills" airline that has a good track record of reliability, he said. American, on the other hand, is a full-service legacy carrier that offers a number of amenities, including in-flight entertainment, wifi and other perks.

"There's a general perception that US Airways is a much more frugal type of airline and that people don't get the same frills," as with American or others, Snyder said.

"Some people are afraid that this will rub off on American, but I don't think it's realistic to think that will be true," he said.

Passengers who carry loyalty miles will likely be able to transfer those into a new program once the new airline combines its systems. Dividend miles should also be worked into the new program, analysts said.

"Your frequent flyer miles will be combined, so don't worry about that,'' Hobica said.

If you hold a ticket on one of the airlines, it will be good for well over a year, maybe even two, before the airlines fly under one airline code, analysts said.

Travelers also can expect to benefit from a fleet of larger jets that will be shifted to newer routes.

"Consumers will be much more likely to board their next flight on a plane built this century and in many cases even this decade,'' said Seaney said.

North Texas passengers, for the most part, have much to gain, said Tom Parsons, CEO and founder of bestfares.com.

The merger would give Dallas/Fort Worth travelers more access to East Coast cities and airports, such as New York's La Guardia. US Airways hubs in Charlotte and Philadelphia could provide a possible combination for the merged airline that would increase American's north-south traffic on the East Coast, other analysts say.

"What we should be happy about is that we'll be able to fly non-stop to more destinations than we've been able to fly to Europe and within the USA,'' Parsons said.

Yamil Berard, 817-390-7705

Twitter: @yberard

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