Winging It: The US Airways-American Airlines Merger

Andrew Harrer/Bloomberg, via Getty

The mass cancellations of flights along the East Coast in the face of a ferocious blizzard earlier this month once again fixed travelers’ attentions on the chronic problems of airline customer service, and so it may not have been the best moment for American Airlines and US Airways to announce a merger, a move that will create the largest airline in the country—and possibly, the most-complained-about one.

News of the agreement to combine the two carriers into a single, $11 billion company, operating under the American Airlines name, raises the question: is bigger really better? American is set to emerge from bankruptcy protection soon, and executives at US Airways have been desperate to acquire another airline since they led tiny America West’s takeover of US Airways in 2005. What remains to be seen now is if the combination of the two legacy carriers will be a win for customers.

“The merger was inevitable,” says Timothy O’Neil-Dunne, an airline consultant and frequent traveler based in Redmond, Washington. “But it was not desired.” O’Neil-Dunne says that’s especially true for passengers, who can’t seem to answer the question: what’s in it for us?

The companies have answered that question only vaguely, saying the transaction will combine their complementary flight networks, increase efficiency, and offer “more options” for customers. The result, it added, would be a competitive global airline with a superior breadth of schedule to “high value” travelers, which is corporate-speak for business travelers and elite-level frequent fliers.

One reason some customers are skeptical is that when it comes to service, neither airline is a star. The latest American Customer Satisfaction Index gives American a score of 63 out of 100 for service, while US Airways ranked just 1 point higher. Both companies also receive a higher-than-average number of customer complaints, according to government statistics. The airlines insist better days are ahead.

An American executive said a recent rebranding effort, which includes new livery, logo, and uniforms, is more than skin-deep. The “new” American is rededicating itself to its once legendary service culture. “American continues to make strategic investments designed to place our customers at the center of all we do,” its marketing vice president, Rob Friedman, said before the deal was finalized. “We’re giving our people the tools, training, and leading technologies they need to provide customers with a uniquely American experience.” A US Airways representative, who asked not to be named because of nondisclosure agreements signed by both airlines, echoed those sentiments: service will improve, he insisted. And besides, there’s no evidence that a merged airline would receive as many complaints as the two original airlines.

But passengers remain worried. The last time American Airlines combined with another airline, by merging with TWA in 2001, customers didn’t benefit in any meaningful way, says frequent traveler Richard Wong, an attorney who lives in Washington. “If the TWA merger is any indication, we can look forward to fewer flights, more inconvenient routings, and unhappier crews,” he says. Passengers have similar feelings about the last US Airways merger, which reduced the number of flights and raised some airfares. In short, it’s difficult for longtime passengers to see the impending merger with anything less than suspicion.

A study by the American Antitrust Institute last summer suggests a combined airline would “substantially reduce competition” on certain routes, create regional strongholds at key airports across the country, and deprive smaller communities of important air service. Then again, a combined air carrier could actually become smaller than the sum of its parts, allowing new airlines to compete for your business. No one knows yet. But we’re about to find out.

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