American Airlines and US Airways Have Officially Merged as The Largest Airline in the World

A regional jet operated by American Eagle sports the new livery representing the new American Airlines in front of a mainline aircraft adorned in the former livery at the international airport in Houston. Photograph by FlyerTalk member dat4life. Click on the photograph for a trip report written by dat4life.

As expected, American Airlines and US Airways have officially legally merged and dethroned United Airlines as the largest commercial airline in the world, as FlyerTalk members started to receive an e-mail message from Scott Kirby — now president of American Airlines — about the official announcement this morning.

What does this news mean for you?

For now, nothing. American Airlines and US Airways will continue with business as usual — for now, anyway. They will still operate as separate airlines for the time being; and their respective frequent flier loyalty programs will still be separate as well.

Although the merger between the two airlines has officially closed as of this morning, the integration of both airlines is expected to be completed sometime in 2015 at the latest.

However — if this merger is anything like those of Delta Air Lines with Northwest Airlines and United Airlines with Continental Airlines — as I first wrote here back in February earlier this year, the implications for you should eventually include but not be limited to the following:

  • The seamless combination of both frequent flier loyalty programs as one — or, at least, reciprocity between the two frequent flier loyalty programs before that happens — to be announced as soon as next month
  • A reduction of the combined workforce — most likely to be reduced by thousands of employees worldwide — primarily those employees who have redundant responsibilities will lose their jobs
  • The departure of US Airways from Star Alliance is expected, as American Airlines is a member airline of the oneworld alliance — and US Airways is expected to join the oneworld alliance on March 31, 2014
  • A decision will eventually be made as to which of the computer systems of the two airlines the combined entity will use for the future
  • Competition in the commercial aviation industry in the United States will be further reduced — for now, anyway
  • The American AAdvantage and US Airways Dividend Miles forums on FlyerTalk will eventually merge into one forum — and I will alert you as to when that happens

 

Hopefully, Doug Parker — the chief executive officer of the merged entity, headquartered in the Dallas-Fort Worth area — learned his lesson from the merger of US Airways with America West Airlines, which was not exactly implemented smoothly.

The final hurdle for this merger was cleared when Sean H. Lane — the judge of the United States Bankruptcy Court of the Southern District of New York who approved the merger of US Airways and American Airlines back on March 27, 2013 — granted American Airlines approval to exit bankruptcy exactly eight months later.

FlyerTalk members — the majority of whom opposed this merger from the beginning — are already paying tribute to US Airways and saying goodbye.

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Comments (Showing 8 of 8)

  • MarkXS at 8:27am December 09, 2013

    Didn’t Parker already say that they were using AA’s SABRE system?

    I’m confused by your statement, “A decision will eventually be made as to which of the computer systems of the two airlines the combined entity will use for the future”. Yes, that’s what has happened in the prior big mergers, including Parker’s own America West (HP) takeover of US Airways last decade. His taking the resulting US off legacy-USAir SABRE for HP’s SHARES was, I believe, even one of the reasons he cited as lessons-learned of things not to do in this merger. He learned to go with the larger airline’s system.

    If only United Continental Holdings had made the same type of “go with larger line’s system” decision. But that’s probably yet another prior-merger-mistake (though not his own) that went into his decision to use American’s system.

    • Brian Cohen at 8:46am December 09, 2013

      While it is most likely that the new American Airlines will indeed use the SABRE electronic reservations system, MarkXS, one thing I have learned from past airline mergers is that just because something is announced amidst the euphoria does not mean that it will necessarily become reality. It remains to be seen what unanticipated problems will surface once the integration process starts…

  • CDKing at 8:58am December 09, 2013

    Stock price is way up now under the new ticket AAL. Close to $25 a share is amazing considering it was nearly a penny stock not too long ago

  • yabadoo at 9:31am December 09, 2013

    It may very well end up being a hybrid system, where SABRE is used for reservations, fleet management etc. but another ERP is used for financial operations, general ledger etc. I would imagine that in the last several months US and AA have done due diligence to agree on which system will be used, and in cases like this as Brian Cohen mentioned, what was initially announced may not be what is eventually implemented once the nuances and realities of such and integration become apparent. They could decide to put in place a brand new ERP and bite costs under the umbrella of integration expenses now, rather than go back at a future date to fix this by incurring significant costs and related upheaval trying to implement a new system. Whatever they do, it will have to be seamless, as the risks of this going wrong are immense.

  • o mikros at 3:25pm December 09, 2013

    Do you know what “duplicitous” means? The word you’re going for here is “duplicate” or, probably better, “redundant.”

    • Brian Cohen at 4:07pm December 09, 2013

      Actually, I do, o mikros. That error was the result of auto-correct gone awry on the computer I was using to type up this article — combined with not catching it in my proofreading.
      I can assure you that I am not being duplicitous in my explanation.
      Thank you for catching that error. I have corrected it — and I ensured that the word redundant did not become another casualty of auto-correct.

  • o mikros at 4:31pm December 09, 2013

    I actually was smiling, thinking to myself how many FTers would attribute calling airline employees duplicitous to nothing more than a Freudian slip! 🙂

    • Brian Cohen at 5:39pm December 09, 2013

      You know what? On second thought, you are correct — I probably should have left that error alone after all…

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