How Will Mega Merger Between American Airlines, US Airways Affect You?
NEW YORK (CBSNewYork) — Two industry giants are joining forces to become the largest airline in the world.
But will the deal help you or hurt you and what will the impact be on Tri-State Area travelers?
The mega merger between American Airlines and US Airways will create a behemoth — 6,700 flights a day to 336 destinations in 56 countries.
“Through the merger of American and US Airways, we are creating a premier global carrier,” said Tom Horton, the CEO of American Airlines.
The new company will keep the American name and it means that just four airlines will control 70 percent of the U.S. market thanks to mergers of the past few years.
Because domestic round-trip airfare rates have jumped by 11 percent since 2009, there’s concern further consolidation means less competition.
“Choices are going to be limited, therefore prices are likely to be higher, sooner or later,” passenger Claudius Sokenu told CBS 2’s Sean Hennessey.
But airline analyst George Hobica said that might not be the case.
“I think it’s going to be a win-win,” said Hobica, the CEO of AirfareWatchdog.com. “Prices could drop…because there will be cost savings with this merger. They’re going to be able to buy fuel-efficient jets, they’re going to have a lot of savings with back-office operations like sales, marketing, public relations.”
And what about your frequent flier miles that are linked to your credit cards?
“People should not panic,” said frequent flier expert Brian Kelly.
Kelly, of Bankrate.com, said your points won’t be affected and that with bonus miles being offered for new cards, this may be the best time to get a US Airways credit card.
“The angle there is, even if you don’t fly US Airways, to open up a credit card or two and those miles will then become American miles,” Kelly said.
With many more routes, it’ll be easier to move about the country.
Passengers won’t see any changes anytime soon. The deal still needs regulatory approval, which is months away.
How do you think the merger will affect you? Share your thoughts in the comments section below…