Merged American Should Keep American Service Levels and American Reservation System

Some tidbits of interest to me from this morning’s merger announcement conference call.

  • The merger is expected to close in the third quarter. In the meantime the airlines remain separate entities. Single operating certificate expected within 18 months of closing the merger although operational integration will happen earlier on.
  • They claim they’ll adopt American service-levels. I’m skeptical and predict some sort of splitting the difference, at least over time. But as I said earlier, US Airways elites are hungry given no meals on 3 hour flights.

  • They don’t know yet which co-branded credit card partner with remain with the merged carrier. Sounds like they’ll be playing Barclays and Citibank off of each other.

  • Combined loyalty program will have over 100 million members.

  • Doug Parker says he learned a lesson from the integration of reservation systems between US Airways and America West — and also from watching Delta/Northwest. As a starting point he thinks it is better to fold the smaller carrier into the reservation system of the larger one. Thank goodness.

Here’s a merger video on bringing the histories of the two airlines together:

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I suspect that service levels in domestic First Class will decline. I fully anticipate that once the FF programs are merged, the new AA will do away with the 500 mi upgrade certs given to elites and will move to unlimited complimentary domestic upgrades, matching UA, DL and US. What is important to note is that purchased 500 mi upgrades (at $30 per 500 mi) provide a lot of the revenue that goes into AA’s enhanced First Class catering.

  2. I think they will learn from the United/Continental merger. Despite a few IT integration issues (and we know those are always tought!), the merger worked out well for frequent flyers. They went with the far better award search engine (Continental), more flexible routing rules (Continental) and also combined miles from both accounts into one. While there aren’t separate co-branded credit cards anymore, Chase does have the 65,000 miles offer (semi-targetted, but easy to get), which is a good stash of miles to pick up with a single application.

    Moreover, we all got both miles accounts combined into one. Overall, I’d say the merger went well in terms of keeping good mile redemption opportunities.

  3. I can’t imagine that Citi will let the AA card go without a tremendous fight. That could be good for us, maybe they’ll match Chase BA card with 1.5 miles per $ or do something else crazy to keep it. At least, I can dream!!

  4. Just got my first US card from Barclay’s in late November. Preparing another round of apps for the end of this month or early March. Trying to decide if I should try for a second US card then or wait for my June apps and hope that the card and 40K offer are still out there. Any thoughts from anyone?

  5. Now that we know the airlines EXPECT the merger to be completed by the 3rd quarter, do you have any updated thoughts on when either of the two cards will go away? For instance, if they work out which credit card company (Citi or Barclays) will get the nod by June, then is it an immediate termination of the other card? Or, even if they figure it out by June, will both cards still be available until the 3rd quarter?

  6. @Gary: Given what we now know of the timeline, what would you peg as a reasonable projection for US to depart Star Alliance?

  7. Gary, I’m thinking of doing a Platinum aadvantage challenge for mid-Feb to mid-May. I’ve been flying American a decent amount this year (y fares). What does Platinum get me that y-fare doesn’t? Is there a limit on how many challenges I can do? Do flights on Alaska count (if credited to aadvantage)? Thanks in advance!

  8. @The Miles Professor – the United/Continental merger was good for award redemption. In addition to the issues you mention, it mean the end of Starnet blocking. (It also mostly eliminated award holds, but you can’t have everything!). I think the elite program is worse for upgrades, they cut back on bonus miles from flying. And operationally it was pretty bad as reflected in on-time statistics. SHARES still doesn’t work properly and resolving ticketing issues takes tremendous time and fortitude and even luck in getting a helpful agent. Fortunately they’re getting more generous during irrops…

  9. @Ozaer N – those will go away once the programs combine… probably. But assuming that US Airways call center agents stay on you will still have clueless agents. Some of what you get them to set up though just won’t get ticketed!

  10. So, can we officially call it the “US of American” airline (instead of USdbaAA)? 😛

    As for the credit cards, a companion certificate for flights on AA will go a long way to attracting the infrequent flier crowd that does pay attention.

    One point that caught my attention in an email I received from US Airways was the announcement about the hubs. “The combined company is expected to maintain all hubs currently served by American Airlines and US Airways, with increased service to existing markets and service to new cities.”

    As a West Coast person, PHX is a bit unwieldy as a hub point to go up and down the coast, and I’m surprised they would keep it. Both Alaska and United have a solid West coast network, so the new AA may not draw as much attention (also to include VX). In addition, LAX is and airport I tend to avoid if I fly into/out of the LA metro area due to traffic, independent terminals, location, and crime, so LAX as a hub is not as appealing.

  11. Gary, somewhat related to this topic. Will we be able to access Admiral’s Club with US Airways boarding pass, if we have AMEX platinum?

  12. I hold a ton of US Air miles and out of curiosity I tried booking some reward flights on AA to Europe. I was not impressed… Flights on BA in F were 125000miles AND $2500 in fees. Changing to all AA the fees fell to “only” $700, but the system was still clumsy. I know I am used to the UA website and bookings as an elite there, but it may be time to burn my US miles before this merger. Lufthansa here I come.

  13. My primary airline is AA, and almost all of my travel is on AA FC TA awards. US doesn’t have FC TA service, and now a whole bunch of US Elites with high mileage accounts are going to be able to use them to book AA FC awards. AA International FC Saver awards are going to become even more difficult to book than previously. Sigh….

  14. In addition to being a lawyer’s and banker’s dream, this merger is a dream to travel bloggers. Look at all of this content.

  15. Smaller airlines should be merged into the bigger one, especially if they are a
    GLORIFIED
    REGIONAL
    AIRLINE

    But never let a lawyers ego get in the way of common sense.

  16. @Larry The increased amount of money needed is due to BA’s fuel surcharge. This is charged by BA on all flights including those on AA metals cross the Atlantic!

    My understanding is AA don’t have a fuel surcharge so cheaper to book using AA’s website when booking non-award tickets & flying AA, book on BA’s website and you’ll be hit with BA’s fuel surcharge even though you aren’t flying BA.

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