US Airways-American Airlines Merger: Ten Things to Expect Next

Now that the Department of Justice has settled its anti-trust suit with American and US Airways, what can we expect to happen as frequent flyers?

  1. The deal is expected to close in December.

  2. US Airways will leave Star Alliance, quickly, and join oneworld. We don’t have a timeframe yet but it should be within a few months. That means if you want to book Star Alliance awards using US Airways miles, you will want to book those very soon. And any changes, once US Airways leave Star, will need to be onto airlines that are in oneworld instead.

  3. Once the two airlines are both in oneworld, they will also implement a partnership with each other, and they will likely make it possible to move miles back and forth between US Airways Dividend Miles and American AAdvantage. US Airways did this when they merged with America West, Delta did it with Northwest, and United did it with Continental.

  4. They will then implement reciprocal elite status recognition sometime next year, although handling upgrades for each other’s elites will likely take some time.

  5. Eventually Dividend Miles will go away as a separate entity, my best guess is in February or March 2015. That means unique Dividend Miles opportunities should be taken advantage of now — for instance you might want to sign up for a US Airways co-branded credit card, as that’s a bonus you won’t be able to get again later. Buying up US Airways elite status in the back half of 2014 could have a strategic play for 2015 American Airlines status as well, which no doubt I’ll explore in greater detail in the not to distant future.

  6. I think we can expect that the combined frequent flyer program will have four tiers, all of the other major ones do, and they aren’t going to penalize US Airways Platinums with lower status.

  7. This is controversial but my bet is that the US Airways domestic upgrade scheme prevails — unlimited complimentary upgrades for elites. Otherwise that would be seen as a major benefit ‘taken away’ from US Airways Platinums, Golds, and Silvers (even though a ‘paid for’ upgrade scheme, of which American has the last in the US, means lower tier elites are more likely to actually get upgraded when they request it).

  8. The best values in the US Airways award chart, like 90,000 miles business class to North Asia, will disappear. The award charts will get combined, and harmonized, starting off with the American chart but I expect to see increases where the US Airways chart starts off more expensive today (e.g. an increase in award pricing to South Asia).

  9. Eventually when airline operations are combined (probably February/March 2015) they will use the American Airlines passenger service system, which is better operationally. They will begin harmonizing inflight standards as well. Remember that — the new American Airbus A319s notwithstanding — American has more domestic first class seats today than US Airways does. We’ll see a future with fewer seats up front. US Airways also has less seat pitch (less room up front) and doesn’t serve meals on flights under 3 hours. There will be movement towards US Airways service standards.

  10. Nonetheless, they will find a way to make money off of the main cabin extra product, if only because both United and Delta offer coach seats with extra legroom as well and it would be hard to announce they will no longer offer it. Doug Parker will learn quickly that he can’t try things like charging for water in coach like US Airways once did.

There’s lots more to come of course and there will be tons of news and details get worked out over the coming months.

I didn’t want this, and as an American Airlines Executive Platinum I am nervous about the future. But at the moment this looks like the best place to be for a frequent flyer, merger risk and all.


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. […] American’s website also says, “Completion of the merger remains subject to the approval of the settlements by the U.S. Bankruptcy Court, and certain other conditions. The companies now expect to complete the merger in December 2013. they expect the merger to close in December.  They plan to move quickly, so don’t be surprise to see US Airways exit Star Alliance in early 2014, as well as see AAdvantage and Dividend play nicely with each other (moving miles, elite benefits, etc) before too long.  I would read this post by View From the Wing for some educated guesses on what happens next. […]

Comments

  1. What’s your take on US continuing the 100% mile match on either the buy miles promotion (like they are running now) or the share/transfer promotion (the one that recently ended) . . . I guess I can see a case made for ending them now or keeping them going . . .

  2. Any predictions on 2-Tier Award redemption similar to what United announced last week? Just wondering if you think non-AA flights will cost more miles. Also, what you think of distance based One World Awards, that will stay or go away? Finally, off-peak awards that AA has for coach and US Airways used to have for business class to Europe, staying or going? Speculation is always fun.

    Cheers,

    PedroNY

  3. Any updates on the latest, best US Air sign-up bonuses? As of February, Gary posted a link that gave 35K with a waived annual fee. Does this still work? The page is live, but I also know that sometimes Barclays will accept any app and then let you know that the offer is no longer available.

    Might as well get going on Item #5 now. 🙂

  4. @PedroNY I do not see them copying UA in terms of the bifurcation between AA/Partners and the magnitude of difference (there are AA and all partner charts now).

  5. I flew DL and US on the identical 3:00 domestic US route this week and last in F at a mealtime.

    Main differences:
    –DL offered hot meal, hot towel service, real glassware, and separate offering of bagged snacks or fruit.
    –US offered bagged snacks and drinks served in flimsy plastic cups.
    –On DL FA’s hung coats, on US they did not.
    –DL’s 20 year old 757 had IFE (not all do), while US’s brand new A321 had none.
    –Seat pitch on US was far tighter than on DL, plus fewer F seats for similar size plane.

    I would assume AA’s service standards meet or exceed DL’s. Whose vision of premium travel will survive this merger? Parker’s or AA’s?

  6. I will fly with US Airways in late December and early January. Hopefully I can accrue them into my Star Alliance mileage!

  7. Any predictions as to how or when the American Explorer Awards will be impacted? We are looking to book in Feb.

  8. @Dennybob – i think you will be fine to book in February. The programs won’t be combined until early 2015 I think. I would guess that there will be tweaks to align the programs in the meantime but not wholesale devaluations in the interim.

  9. Gary,

    As long as US remains a carrier but part of OW, do you believe it will count as a “separate” carrier for purposes of the AA OW Explorer Award?

  10. @Ron Lieber – that is the most likely outcome, yes. That’s what happened at United. And US Airways doesn’t even offer anything above lifetime silver.

  11. Gary, my head is spinning! I’ve got lots to learn! Thanks to you, I have AAdvantage & 30K pts. Reading & enjoying your blogs. Got a kick out of the wrong hotel one.

  12. @Matteo I bet they will start reciprocal benefits two months from now, at least earn and burn, but it will be much longer before the programs are merged… my guess is the first weekend of March 2015

  13. I dream of them providing special recognition to flyers who are both US Airways Chairman’s and American ExecutivePlatinum, like, say… Concierge Key? 😉

  14. Do you think #8 would happen simultaneously with them leaving star? Possible chance at the 90k n Asia on one world?

  15. @E – yes there is a good chance that for a short time we could book 90k roundtrip business class awards to Hong Kong on Cathay Pacific 🙂

  16. On #8, I think you’re right but I’d say they will start by throwing away the DM chart. Everything is already geared toward oneworld and whatever accounting calculations they use. They’re not going to recategorize any of their regions for example.

  17. Re #5, how often can one apply and get approved for a US Airways MC? I currently have one and previously had one that I closed before getting the current one.

  18. I have 10K EQM in US, 15K EQM in AA in 2013. Can I assume that I would Gold on the new American in 2014 by combining the EQMs?

  19. Gary, I hope you are wrong about lifetime platinum on AA, but I’m sure you are right. All that work to get it, and now it will be too low on the totem pole to amount to much. No more upgrades especially if they go unlimited complimentary. Too many butts to put in F seats. Looks like I’m back to burning miles for upgrades. Thanks Doug! 🙁

  20. If I have a codeshare booked through United on USAirways next week, will I be able to credit to United?

  21. @smitty06 — I’m guessing a little bit here and don’t know when next year this is booked — I imagine that the US Airways-United codeshare agreement will be terminated at some point next year. Then you will be reticketed onto a pure US Airways flight. And since this is also likely to be after US Airways has left Star Alliance, you would not be able to credit the flight to a United account. The question is whether your flight is before or after the date at which this all happens. Early next year? You should be fine. 11 months from now? Guessing not.

  22. 4-tier AAdvantage program? I don’t think this is the sure thing. Right now AA OW major partners (BA, IB, CX + ?) all have three tier systems.

  23. Here are some more….
    11. Higher prices due to reduced competition.
    12. More fees and higher fees.
    13. Lots of laid of employees and capacity is cut and jobs outsourced.
    14. A drastically devalued AAdvantage.
    Oh what fun 🙁

  24. @Alex_I – you are correct, and BA just added a 3rd elite tier to match AA given their joint business venture. But do you actually see US Airways Platinums being told they’re no longer special?

  25. Hi Gary, thanks for your analysis re the merger. Just started my MR drive for 20K Aegean *G flying US out of Tampa. With US Air leaving Star Alliance, it will be a lot pricier to make the 20K since the lower fare buckets on United get only 50% mileage credit. Any thoughts on whether flights into March/April will safely credit to Aegean?

  26. @Henry My best guess is that US Airways exits Star sometime late in the first quarter of the year. April could be pushing it. We do not know transition details at this point.

  27. Gary what will happen with the existing Barclay’s US Airways cards? Will Barclay’s have some type of incentive such as switching existing card holders to a new card with some type of bonus?

  28. @Anon/Gary (posts 27 and 29) – Opened 1st USAir MC in Feb. Approved with 1st card still open for 2nd card last month. Maybe things have changed since then but possibly worth a try…

  29. Gary, if i have already redeemed United miles for an award on US Air next summer, will i be affected? thanks

  30. A bit surprised that this hasn’t yet been covered in the blogs, but US Airways President (and future AA President) Scott Kirby said yesterday that US and AA would begin offering reciprocal frequent flyer benefits on January 7.

    Presumably, this would mean that you could accrue ff miles on either carrier after that date. Not sure about upgrades and award redemptions.

    I’m sure one issue that will come up is the end date that Star Alliance frequent flyers (particularly UA fliers) can earn mileage flying on US. If you’re a UA flier, I’d be careful booking tickets on US-operated flights for next year if you’re unwilling to accept AA miles. That said, I assume there will be a few months where you could still credit your miles to your UA account, but nobody really knows yet.

  31. @iahphx I did hear that but it struck me as only being reciprocal earn and redemption, not elite status recognition (although they could do priority boarding/checkin etc) and not upgrades. We’ll know more in the next few days for sure so I as holding off

  32. @Francisco C – existing tickets will certainly be honored though any changes once US Airways leaves Star Alliance will need to be changed onto flights of their new partners

  33. @Gary – what will happen to the Amex partnership with US Airways? Will the combined company still be a transfer partner for Amex Membership Rewards? Will Centurion members still get Platinum status?

  34. Either way, I’m transferring my US airways miles over to AA. I love AA and their planes, although not the grumpy attitudes. Then, I’ll use my AA mile award whenever.

  35. I booked on flight on Orbitz with US Airways believing they would still honor Mileage Plus and were still listed as Star Alliance members. I booked last week for Dec.17 and return Dec.18.Orbitz didn’t list my number. Will I still be credited for my Mileage Plus miles?

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