- News & Analysis
- Strategies & Tactics
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.’
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.
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.
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
Stay in Touch