Photo: Chris Sloan/Airchive
Now that the long planned merger between American Airlines and U.S. Airways has been officially announced, travellers will likely wonder what it will mean for them –– especially their wallets. We reached out to George Hobica, founder of Airfarewatchdog, for his take on the deal and what future fliers should expect from the world’s biggest airline.
Frequent flyer miles: There’s not much to worry about here. Frequent flyer miles and statuses will be merged and, once the merger is complete, there should be even more route combinations available to use them.
Still, after the nightmare computer outages and customer services snafus that have plagued United since its merger with Continental in 2010, chances are we could see some hiccups down the road.
Routes: Domestically, US Airways currently has hubs in Philadelphia, Charlotte and Phoenix, which will connect with American Airline’s hubs in Dallas, Chicago, New York, Los Angeles and Miami. More routes means more destinations for travellers to choose from, and also more options for rerouting flights if one gets cancelled or delayed, Hobica said.
Airline fees: In a recent Airfarewatchdog study, American Airlines ranked as the worst offender for charging the highest travel fees, but Hobica said he doesn’t expect huge fee changes to come with the deal. That’s the good news. The bad news is that with more airline consolidation in recent years, that means passengers have fewer other airlines to choose from in order to avoid fees if they want.
“The presence of competition does keep fees down,” Hobica said. “When there are fewer airlines, it’s easier to impose your own fee structure.”
Airfare costs may rise: The merger could bring slightly higher rates for flyers on the nonstop routes that both American and U.S. Airways flew. The reason? Since they’re now allied, the airlines will no longer be competing to offer the lowest rates and lure in passengers. Unfortunately, that could mean pricier fares, though it’s worth noting there are still plenty of other major airlines in the sky to compete with.
Hobica said he expects any fare increases to be lower than 10 per cent.
A snowball effect: Since the merger will make American Airlines/US Airways the largest airline in the country, it could cause a ripple effect. “Airlines hate to be No. 2,” Hobica said. For that reason, United and Delta might soon start looking to consolidate other small airlines, such as Frontier, Alaska and Hawaiian, to earn back the top spot in the industry. United’s already taken Continental under its wing (thought it wasn’t exactly a smooth transition).
The bottom line: Hobica said the deal will be a boon for the industry and open up options for travellers flying cross-country. “I suppose the only downside you will see is less competition, (and) slightly higher fares,” he added.
At any rate, it could be months before travellers notice any difference in service at all, as the ink has barely dried on the deal and it will take that long to fully merge the two airlines together.
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