MERGER: US and AA Dec 9 2013 implications for AA flyers (new)
 

The arguments and discussion pro- and con- the possible airline merger, a reverse takeover of AA by US, are over.

The US Department of Justice's objections have been satisfied, the bankruptcy court has approved, a joint airlines committee has been working behind the scenes for some time, etc. The merger is scheduled to occur 9 December 2013, and it has been stated no major changes impacting passengers will be forthcoming during the holiday period.

Mr. Doug Parker, US' CEO, previously the HP (America West) CEO who headed HP's reverse takeover of US, will be CEO of what is being touted as "the new American", headquartered in the Dallas-Fort Worth metroplex.

This new thread has been opened to discuss the ramifications and impact of the merger on, currently, AA flyers.

Please: keep it respectful, on topic and free of dilatory content disruptive to the topic.

/Moderator

N.B. The previous discussion thread regarding a putative merger, pros, cons, DOJ actions, etc., "AA - US Merger Agreement / Announcement / DOJ Action Discussion (consolidated)"can be found here.

We need to agree on an acronym for this new entity.

I nominate UScAAre.

That's not bad. HPdbaAA seems popular, too.

IT Fears
 

The obvious fear is AA being sucked into the US Airways IT system, which I believe to be the case, we all read the stories of the debacle ensuing America West absorbing US Air into its IT system (cancellatiosn, ticketing issues, FF issues etc...). AA is much larger and more complex than the old US Air. If Doug Parker and team are not on top of the IT issue I see a customer service disaster coming soon.

Haven't we read US is migrating to AA's system? (We can only hope "Ventana" heals soon, and that it's part of the preparation required for the upcoming systems integration.)

what about CactAAs

cAActUS?

Actually, we don't. AA is fine, or its new ticker symbol, AAL, would work also.

Agreed. When we need to distinguish the former entities PMAA and PMUS will do fine.

My preference is that any cute names, especially for Mr. Parker, will be avoided.

PAArker? :D

They have confirmed in interviews that they will be migrating US over to Sabre. (pm-pmUS used Sabre but migrated to pm-pmHP's shares platform after their merger).

I agree. I'm tired of it already.

I also think the title of this thread is a bit over the top.

It is also incorrect in that this is not by the usual definition a "reverse takeover". A reverse takeover is generally used by a privately-held company to go public by taking over an existing publicly-traded company. This is legally a merger of two corporations and should be referred to as such.

Oh, why go around confusing things by using correct terminology and facts.

Cheers,
AA777

You can nominate this as long as I get credit for introducing this term all those months ago when AA dropped the BK ball on us. ;)

http://www.flyertalk.com/forum/20242440-post76.html

UPDATE: This may be the earliest mention of it - http://www.flyertalk.com/forum/20236693-post3637.html

USdispAAire?

To the OP's topic, I think you will see an overall devaluation of AAdvantage both in terms of earning and redeeming miles. My guess is this will be announced in 2Q14. Changes in Elite perks will be announced by the end of 2014.

No specifics as to what, just that AAdvantage will be dumbed down significantly.

The last 33 years were fun while they lasted for me. :(

I think they'll likely introduce some sort of Elite Qualifying Dollar requirement (in line with UA and DL) to further cull the herd. That, and they are going to reorganise the tier benefits and/or add at least one tier (think Silver or Diamond). Good thing I went to TAAhiti on AA's dime this year instead of next. :D Oh, and they will likely drop the second A in AAdvantage (about time).

I can't find a way to say this with no snark at all... But is this a speculation thread or a reality thread? So far we don't know what the implications are...

I doubt the new USofAA will drop an A anytime in the next couple decades, the EQD requirement may be coming, but not for status earned in 2014 (since so many tickets for 2014 dates have been sold through different channels by both airlines) and valid through 2015, so it's a little early to throw in the towel.

I think we know the answer to that question.

Expect few changes for 2014. Around Q3 new changes to the AAdvantage program for 2015 to be announced, particularly concerning elite status. Wherever DL and UA may go expect AA to closely follow. Goodbye EQMs, hello dollar spend or fare class. The MR forum won't mean as much anymore.

They've already dropped the A in Business ExtrAA. :D The only thing that's really standing in the way of dropping the A from AAdvantage all together is that bottom-feeder car rental company Advantage. However, they're owned by Hertz, so I'm sure the branding rights can be bought outright.

Well then, this should be a fun thread :)

If there are any premium pax currently flying with LCC and appreciating their DMs, they may be disheartened if the merged program is named after LCC's onerous discounting program. But I guess that's off topic for this thread because it acknowledges the possible existence of PM US pax.

This is also somewhat incorrect. A "reverse takeover" is also a reference by employees and/or customers wherein the "lesser" entity (in the minds of the beholders) become the leaders and/or greater beneficiaries of the original "greater" entity (also in the minds of the beholders).

Whether it's a legal definition or not means little to those who perceive that others benefit in unequal proportion to their original position or expectation at the beginning of the merger.

It's virtually impossible to avoid these perceptions in entities of this size. There are promises and expectations on both sides that are likely to be unfulfilled; and it's a challenge for the new leadership how to reset these expectations over time without disrupting the greater ongoing concern.

The game is coming to an end. It was really fun while it lasted. The dollar requirement will come. And within a year we will all learn how much (or little) the ranks will be thinned.

But I still believe that the people who mileage run are indirectly profitable to the airline. These flyers are passionate and are fans of the airline they fly, and they will try their best at work to fly the airline, and try to get others to fly them too.

They've already announced they are going to be using Sabre. Not worried about a COdbaUA SHARES debacle.

^ cute

PreCoupAA?

The EQM thing probably would have happened eventually, anyway.

A $10k minimum spend on airfare or $25k minimum card spend does not seem that onerous to me, although they could always raise those later. I'd hope maybe AA would at least be friendly enough to include all partner spend (presuming the partner was willing to transmit the information) and not exclude taxes.

Wild, unfounded speculation #1
 

Okay, I'll play.

I predict that the percentage of times my upgrades clear out of Toronto will go down from their current level of 100%. But then, that is bound to happen now that the 319 doing the DFW route.

And then there is Concierge Key..... I enjoy the benefits, although sometimes unpredictable at the airport. I can see it re-branded into another semi-tier if it survives.

I've been calling Parker's company UScare for years.

Updated to reflect the new reality.

Perhaps when the merger actually happens we can start yet [another] thread with posts detailing what changes are in reality occurring with the merger rather than the wild and unsupported speculation we see here?

What if the new AA continues working hard to appease its frequent flyers and becomes profitable enough to make things even better...woah. /Keanu.

I definitely share the concerns about many of the likely "endangered" EXP perks (SWU's from any fare class, frequency of domestic upgrades, EQM's, status with no minimum buy-in, etc).

But I'm wondering if those who are more familiar with US know of any service or FF program attributes of US that are *better* than the AA counterpart, that they hope will come over via the merger? Haven't seen many mentioned thus far, but curious...

The one facet that comes to mind (some will consider this a pro, some will consider it a con) is that the US system offers unlimited upgrades (space available, of course) for all elite levels. There are no 500-mile upgrades required.

Here's the things I've seen mentioned in the US Air forum and/or the Barclays card threads:

Not having to pay $450 for a credit card that earns EQM
A $99 domestic companion certificate
Waived award processing fees for high CC spenders
No co-pays for elites to upgrade with miles (domestic only)
CP upgrades actually begin clearing at T-7 days (some might consider that a con)

Oh, and some cheaper award redemptions... but I think we all know how that will go.

I may be the only person here concerned about this particular implication. I don't think it warrants a new thread.

Am I correct that, for the time being, there will still be two separate liveries flying? I ask because I write and update travel guidebooks. The "How to Get Here" sections for several Latin American countries presently include both AA and US, at the level of detail, for example, that "American flies from Miami and Dallas; US Airways flies from Charlotte," and not beyond that. I remember having a grace period where I was still able to mention both UA and CO following that merger.

I realize there could be some eventual consolidation of hubs, and a given Latin American destination might not receive flights from MIA, DFW, and CLT. For the time being, though, things shouldn't change too drastically?

Gracias.

Lots of stuff to speculate on under the "implications for AA flyers" umbrella. Here's what's on my mind...

Clubs - Probably no closures, except at airports where both have clubs. Reciprocal access should come fairly quickly. AA's complimentary F&B amenities are already quite meager so it's hard to see cutbacks in that area. It will be interesting to note whether the paid food model continues. I wonder how profitable it really is for AA. Membership fees for the US clubs are less than for the AC, and there is no $50 first year fee. It is hard to believe that this will be rationalized in any way other than to quickly raise the US fees to the AC level.

SWUs - Chairman's Preferred (CP), the US EXP equivalent, get 4 SWUs per year (2 for member and 2 for companions). EXPs get 8 and all can be used by the member or all by companions or some combination. US SWUs can be used to upgrade any fare to any destination, but will upgrade only a single segment. So any connecting segments must be upgraded via the normal complimentary upgrade process. Clearly if the combined airline moved to the US scheme EXPs would be far worse off. I certainly hope and expect that those earning EXP in 2014 will get 8 SWUs with the current T&Cs. If not, they had better make an announcement ASAP.

Mileage upgrades - US requires fewer miles for domestic upgrades (up to 10K each way versus AA's 15K) and waives copays for all elites. On its face, US appears to be far more generous than AA but capacity controls may be tighter. Mileage upgrades are almost always available on AA domestic routes if you book far enough in advance.

Elite upgrades - US provides complimentary upgrades to all elites. AA requires Golds and Plats to pay for upgrades with "stickers". This one has been, and will be, debated ad nauseum and I have no idea where it will end up. Upgrade windows open earlier on US (7 days for CP versus 100 hours for EXP, for example). In general, the ratio of F to Y seats is less favorable in the US fleet, but I would not expect them to change the ratios on the current AA planes.

Companion upgrades - Both airlines upgrade a companion on the same PNR at the same time as the elite member, except at the airport. No companion upgrades are possible from the airport list. That is unfortunate, but it may be a US system limitation that would go away when they move to the AA system.

Onboard meals - AA is the most generous of all carriers, US is probably the least generous. Meals in F only if the flight is at least 3.5 hours, otherwise just a snack basket. Moving the combined carrier closer to the US scheme is an obvious way to cut costs and I fear that is exactly what will happen in short order. Perhaps not as draconian as US, but something like the DL model (snack basket if < 900 miles, cold meal if < 1500 miles, hot meal if over 1500 miles). And say goodbye to warm nuts.

Elite levels - US has a 75K level. I suspect the combined carrier will eventually have one too. If they make an interim attempt to provide reciprocal upgrades it will be interesting to see how they rank US Plats versus AA Plats.

MCE - US has no equivalent but the combined carrier will stick with the current MCE to be competitive with DL and UA.