American Airlines and US Airways announced Thursday plans to merge in an $11 billion deal that would create the world’s largest airline, and according to some industry analysts, make airfares take off.
“You’re going to be paying more, in general, for your airline tickets,” airline analyst Rick Seaney told WFAA television.
“Even though people say this particular merger of US Airways and American Airlines isn’t going to raise ticket prices, I don’t believe that one bit,” said Seaney, who founded the travel website FareCompare.com.
“Consumer harm is the norm with recent mergers,” Charlie Leocha director of the Consumer Travel Alliance told the Dallas Morning News. “While the airline management rakes in merger bonuses, consumers are the ones who bear the brunt of post-merger integration service problems.”
The merger is expected to be finalized later this year, the companies said, with plans to rebrand under the American Airlines name.
If the merger is approved by federal regulators and American’s bankruptcy judge, it would leave four major airlines in the United States – the new American, United, Delta and Southwest – controlling about 70 percent of the US air travel market.
Frequent flyer miles are also an area of concern for travelers of the two airlines. Industry experts said the miles programs will likely roll into one, but it will be months if not years before the two airlines are fully integrated.
Analysts are also concerned American’s miles program could become flooded with new elite fliers, making it harder for infrequent travelers to upgrade seats or cash in miles for tickets, analysts told WFAA.
The new American Airlines will offer more than 6,700 daily flights to 336 destinations in 56 countries maintaining all the hubs currently served by both airlines, American Airlines outlined in an email to customers Thursday.
For US Airways passengers the merger means gaining access to some international travel destinations including London and Latin America through American’s existing network, the Associated Press reported.
“The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace,” US Airways chief executive Doug Parker said in a statement.