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What an American-US Airways merger means for you

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By Thomas Olson
Thursday, Feb. 14, 2013, 9:42 a.m.
 

A merger between US Airways and American Airlines would mean fewer hassles for passengers flying to destinations that are not served by direct flights from Pittsburgh — especially international routes.

The combination, officially announced on Thursday, opens access to more destinations via connections through an expanded network of hub airports, providing seamless travel because passengers would not have to worry about switching airlines for different legs of their trips.

“Instead of changing carriers, you could check a bag on American and fly American's network,” said Sean McCurdy, president of the Business Travel Association's Pittsburgh chapter in Moon.

The new American Airlines would operate more than 6,700 daily flights to 56 countries and 336 cities, including business favorites such as London and Hong Kong.

“There's definitely going to be a benefit for travelers going internationally,” McCurdy said.

That means not getting off a plane at one airport and checking your bags again for a flight on a different airline that does not have a relationship with the carrier that took you to the first stop. It could also mean shorter layovers due to tighter connections because the entire trip is arranged through one airline.

“More people will be able to get to more places more easily,” said American CEO Tom Horton, who would become non-executive chairman of the combined carrier.

While passengers would face fewer frustrations, the combination could have its downsides. One of them, analysts said, could be higher fares as competition is reduced.

The mergers of United and Continental, and Delta and Northwest in the past four years have been accompanied by higher fares. The price of a domestic round-trip flight has climbed more than 11 percent since 2009 when adjusted for inflation, according to the Bureau of Transportation Statistics.

“Obviously, the more competition there is, the better your fares are,” said McCurdy. “And now you're taking away competition, going from four down to three major legacy carriers — American, Delta and United.”

Kevin Mitchell, chairman of the Business Travel Coalition, an advocacy group based in Radnor, said industry consolidation “makes price increases easier to achieve.”

The long-expected merger deal creates the world's largest airline by combining fifth-largest US Airways with third-largest American, which must first exit bankruptcy. Revenue would top $40 billion.

American flies to 130 cities not served by US Airways and belongs to a larger international alliance, Oneworld. US Airways would leave the smaller Star Alliance.

US Airways passengers will gain access to American's international destinations, particularly London and Latin America. American's passengers will be able to better connect to smaller U.S. cities that US Airways serves.

None of the Pittsburgh routes flown by American and US Airways overlaps. From Pittsburgh, US Airways operates 42 daily flights to nine destinations, while American operates 13 flights a day to four destinations.

The two airlines said they expect to close the deal sometime this summer, provided it is approved by the bankruptcy court, US Airways shareholders and the federal Transportation and Justice departments.

The new airline would take the American Airlines name and be based in Ft. Worth, American's current headquarters. The airlines would probably take at least a year to integrate their operations.

US Airways employs about 1,800 people across Pittsburgh, versus American's roughly 80. US Airways' presence includes more than 600 flight dispatchers and crew schedulers and others at US Airways' flight operations control center in Moon.

The $25 million facility, which opened in late 2008, is the airline's nerve center, coordinating US Airways' more than 3,000 flights a day systemwide, along with the crews who staff them.

US Airways spokeswoman Liz Landau said it was “premature to discuss specifics” related to the flight operation control center. That would be one of the key issues sorted out by the two airlines' transition team members, she said.

Darryl Jenkins, a veteran airline consultant, calls the Moon control center a “state-of-the-art” facility and doubts American would shutter it.

But Dan Persuit, president of Local 545 of the Transport Workers Union of America, which represents US Airways flight dispatchers and coordinators, said “it's a possibility” that the merged carrier could move the operation to Texas.

US Airways CEO Doug Parker, who would become chief executive of the merged carrier, said the combination would not entail “any major layoffs.” The airlines expect to cut combined costs by about $150 million but did not detail those savings.

The Associated Press contributed to this report. Thomas Olson is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or tolson@tribweb.com.

 

 
 


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