Now that the long-rumored merger between American Airlines and US Airways is finally a reality, travelers may be nervous about what’s next — and rightly so.
“There will be winners and losers,” said Tim Winship, editor and publisher of FrequentFlier.com.
Here are some of the consequences you can expect with the creation of the world’s newest mega-carrier.
Airfares won’t immediately shoot higher
Fliers planning a trip on either carrier don’t need to worry that tickets will suddenly become more expensive overnight. Nothing will probably change in the very near term, said George Hobica, founder of Airfarewatchdog.com.
“It’s going to take them quite a while before these two airlines are actually one airline,” he predicted.
But airfares will eventually increase
When the merger is finally consummated and the combined airline starts cutting or combining routes, fares will go up, especially for business travelers who do same-day round trips, don’t stay over Saturday night or don’t have an advance purchase, Hobica said.
Routes that will be most affected are those that American and US Airways both flew non-stop, such as Charlotte, N.C., to Miami; and Dallas to Philadelphia, he added.
“We’ve seen this happen time and time again in previous mergers,” Hobica said.
Rick Seaney, CEO of FareCompare.com, noted that competition is the main driver of cheaper airline ticket prices, so with fewer carriers competing for your business, there’s less incentive to cut fares.
“The only good news is that if airlines get too frisky with higher prices, consumers will let them know quickly by cutting back on air travel,” Seaney said. “With so few domestic airlines … consumers’ wallet size will be the last line of defense.”
The transition will be a pain for travelers
There’s no doubt about it: Fliers will likely have to endure some computer glitches, reservation snafus and system hiccups when the two airlines begin to integrate their operations.
Typically, there are problems during mergers, Hobica said, though he pointed out that the marriage between Delta Air Lines and Northwest went smoothly.
But just look at United Airlines, which experienced several major computer problems last year as it tried to combine systems after its merger with Continental. In some cases, passengers were stranded for hours.
“I would be very surprised if there were no glitches,” Winship said. “At the end of the day, the new company will be the world’s largest airline … that won’t happen without a lot of pain.”
He recommended that frequent fliers check their accounts carefully just to make sure all of their miles show up correctly after the two carriers become one.
Elite-status fliers expecting an upgrade may be in for a surprise
When the two airlines’ frequent flier programs merge, there will suddenly be an overabundance of elite-status members competing for perks, particularly upgrades, Winship noted.
“There are only so many upgrades to go around,” he said. “At least in the first year, it’s going to be very difficult – especially for lower-level elites – (to get upgraded) because they have the lowest priority … it’s going to be a serious problem for people who have made it a priority to earn elite status.”
Longer term, the sudden glut of elites may ease somewhat because fliers will have to requalify to get their status for the following year, Winship said.
Still, airlines industry-wide have been cutting back on benefits for lower-level elites so that carriers have more to offer for their most profitable customers, he added.
Hobica thinks the combined airline will follow the Delta model, which will reward passengers who spend the most money on tickets, not just fly the most miles.
The new airline will be stronger
This is the good news about the marriage of American Airlines and US Airways, experts said. The new carrier is poised to deliver a better product and become a bigger player on a global scale.
“(The merger) is likely to make the combined entities stronger in the long run – thus more profitable,” Seaney said.
“With financial stability airlines can improve their woefully neglected product. Consumers will be much more likely to board their next flight on a plane built this century and in many cases even this decade.”
Hobica noted that international carriers, such as Turkish Airlines, are starting to add routes from U.S. airports, hoping to siphon off lucrative international travelers, especially those flying in international business class. The merger will help the new airline compete with those carriers, Hobica said.
“It will definitely be stronger,” he added.