I finally had a chance to listen to American’s second quarter earnings call. I’m over a week late to that party, but it’s been a very busy week.
After American’s formal remarks, there were a few questions that touched on the integration and mentioned the frequent flyer program (which they see as a key competitive differentiator and how they’ll win competitive business).
There was a recurring implication that the US Airways and American programs wouldn’t be combined imminently. I had long assumed that we’d be looking at a cutover to a single program in late February or early March of 2015 — because cutovers usually happen during that travel lull, and because there’s a strong desire to see integration happen quickly, to begin to recognize the ‘merger synergies’ that were the argument for the merger in the first place and upon which senior management bonuses are supposed to be based.
American’s Chief Information Officer, Maya Leibman, mentioned that each airline brings to the table over 700 systems apiece that have to be integrated. They’re whittling those down as they go. She reiterated the general decision to go with legacy American systems as it’s the path of least resistance, they’re larger and scale better, and means fewer employees and customers to transition to new systems (since legacy American has more of both).
Chief Operating Officer Robert Isom made a few things clear that I hadn’t seen referenced publicly before.
They’re midway through the process of preparing for a single operating certificate. Having a single operating certificate is necessary to operate as a single airline, schedule planes and routes across the airlines, and operate under a single carrier code (“AA”).
He says that it will be late in the second quarter of 2015 or shortly thereafter when they will begin work with the FAA on getting a single certificate.
He then goes on to say that moving to a single reservation system for the two airlines will take place late next year, hopefully.
“Late next year” puts them smack into busy holiday travel, and they’re not going to ‘turn a switch’ the Wednesday before Thanksgiving or the Sunday after.
They don’t have a date yet for when the two airlines combine, but it’s clearly the end of 2015… or the beginning of 2016.
Who says earnings calls are boring? Well, they mostly are. And they’re mostly perfunctory at least for folks familiar with the business. But they do shed some insight as well.
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