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Q&A: The Fate of American Flyers in a Merger With US Air?

Q&A: The Fate of American Flyers in a Merger With US Air?

Question from Mary-Lynne F. –

Now that the American Airlines/US Airways merger appears certain, what do you predict will be the fate of frequent flyers, especially those with American?

Since US Airways will be the dominant partner, does that mean that the new airline will be part of the Star Alliance? Will elite status earned on American carry over? What about availability of award seats? There’s a lot more to this issue than having one’s miles ‘safe.’

Answer –

The prospect of a merger is always disconcerting, especially to customers of the weaker airline in the tie-up.

Although there are many questions that can’t be answered with any certainty, there’s ample precedent in past airline mergers that provides insight into likely outcomes.

Alliance Prospects

Currently, American is a founding member of the oneworld alliance (British Airways, Cathay Pacific, Qantas, etc.). And US Airways is a member of the Star Alliance (United, Lufthansa, Air Canada, Singapore, etc.).

In the most likely scenario, the merged carriers would remain a partner in oneworld.

That means no change for American flyers.

It’s a modest negative for US Airways customers, as Star is generally considered to be the most robust of the three alliances.

The Status of Elite Status

It’s impossible to predict what the frequent flyer program of the merged airlines would look like. More like AAdvantage, or more like Dividend Miles? Assuming US Airways is the dominant carrier in the merger, its management philosophy is likely to prevail.

Whatever the program’s final form, it’s a pretty sure bet that no one from either program will lose his elite status. It’s a fundamental premise of airline marketing that identifying and rewarding your best customers is key to maximizing profits.

Keeping elite flyers onboard means, at a minimum, protecting their status when programs are consolidated.

Award-Seat Availability

There’s no definitive source of data comparing airlines’ award-seat availability. So we’ll have to resort to anecdotal evidence here.

Based on the considerable amount of feedback I receive from readers and fellow travelers, American has been consistently more generous than US Airways with its award seats. American seems to view awards as a welcome investment in loyalty whereas US Airways treats them as an unwanted expense.

Assuming once again that US Airways’ management philosophy carries over to the new carrier, that would suggest that American AAdvantage members will be disappointed with the scarcer award availability in a merged program.

Definitely a downgrade.

The ‘Safety’ of Miles

It’s always worth pointing out that no one needs fear that his miles would be lost in a merger.

There are many past airline mergers that included consolidation of the carriers’ mileage programs. And to date, no miles have disappeared in the merger process.

In some cases, the merged programs were deemed better than their component parts, in some cases worse. Either way, there is one predictable upside to program consolidation.

When programs are merged, miles from both programs are folded into a single account. That gives travelers who have miles in both programs access to more awards and higher-level elite status.

At least in that respect, members of both AAdvantage and Dividend Mils will be ahead of the game in the event those two programs become one.

Reader Reality Check

What do you expect in the event of a US Airways-American merger?

Other Posts of Interest

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  • garydpdx

    US Airways has stated that in a merger with AA, they move to OneWorld while things are worked out to become one integrated carrier.

  • garydpdx

    US Airways has stated that in a merger with AA, they move to OneWorld while things are worked out to become one integrated carrier.

  • BobChi

    Two more big downgrades for American flyers (if the US pattern dominates) are the loathsome reward booking fees US charges, and the lack of one-way redemptions. Of course I don’t think it’s certain that everything about the dominant partner is going to be preserved in an integration of the programs. 

  • BobChi

    Two more big downgrades for American flyers (if the US pattern dominates) are the loathsome reward booking fees US charges, and the lack of one-way redemptions. Of course I don’t think it’s certain that everything about the dominant partner is going to be preserved in an integration of the programs. 

  • http://www.facebook.com/t.nick.knight T Nick Usalis Knight

    I would get a AA promo point cards well you can.  A quick way to get two rewards for one airline. 

  • http://www.facebook.com/t.nick.knight T Nick Usalis Knight

    I would get a AA promo point cards well you can.  A quick way to get two rewards for one airline. 

  • FirewindII

    There isn’t much at all in this article, as Mr. Winship says repeatedly.  

    Some thoughts: I’d suggest that much might be devined from what is occurring in the UACO merger, primarily because it is like CO taking over UA (as opposed to the other way around).  Despite the surviving brand, in the UACO case, the management’s philosophy and advantage is Continental’s and to CO’s loyal flyers.  Second, AAdvantage is now out front of MileagePlus in several respects.  When the impetus is AA’s bankruptcy, and the idea of the USAA merger is to to solve it, it’s got to be by giving haircuts to AA all around (well, to employees and customers).  There will be great downward pressure on costs.  Third, not least, AA and UA have watched each other across the room since forever, the one following the other repeatedly with features and enhancements over the years.  It’s burned into their corporate culture, no matter what Phoenix says. 

    For these reasons, I suggest that the best reads are over in the Mileage Plus forum.  For example, see the very long threads by the most loyal, knowledgeable pre-merger United customers.  And, whether you agree or not with their dissatisfaction, do note the contrast between the views of the pre-merger United most frequent flyers and the pre-merger Continental elite w/r/t elite status.  It accounts for many, albeit probably short-lived (I suggest because of the changes that AAdvantage will have to do under pressure), defections of top flyers from Mileage Plus to AAdvantage.

  • FirewindII

    There isn’t much at all in this article, as Mr. Winship says repeatedly.  

    Some thoughts: I’d suggest that much might be devined from what is occurring in the UACO merger, primarily because it is like CO taking over UA (as opposed to the other way around).  Despite the surviving brand, in the UACO case, the management’s philosophy and advantage is Continental’s and to CO’s loyal flyers.  Second, AAdvantage is now out front of MileagePlus in several respects.  When the impetus is AA’s bankruptcy, and the idea of the USAA merger is to to solve it, it’s got to be by giving haircuts to AA all around (well, to employees and customers).  There will be great downward pressure on costs.  Third, not least, AA and UA have watched each other across the room since forever, the one following the other repeatedly with features and enhancements over the years.  It’s burned into their corporate culture, no matter what Phoenix says. 

    For these reasons, I suggest that the best reads are over in the Mileage Plus forum.  For example, see the very long threads by the most loyal, knowledgeable pre-merger United customers.  And, whether you agree or not with their dissatisfaction, do note the contrast between the views of the pre-merger United most frequent flyers and the pre-merger Continental elite w/r/t elite status.  It accounts for many, albeit probably short-lived (I suggest because of the changes that AAdvantage will have to do under pressure), defections of top flyers from Mileage Plus to AAdvantage.