Superguy

Yeah, I agree there. AA and CO wouldn't have been a good tie up. Can you say overlap? IAH/DFW, EWR/JFK, CLE/ORD? Ugh!

I think the merger would have been handled better under Kellner or dare I say, Tilton.

Ambraciot

The merger was not ideal and I'm nervous about the combined FF program, AA lost its best reward options and it seems like management is using auto enroll promos to issue more miles per passenger mile than any competitor. What do people think about the current and future value of an AA mile?

Superguy

No matter who issues it, the worth of a mile always decreases. There's always a way to devalue a program, whether it be thru giving less miles, requiring more miles to redeem, or a combo of the two.

LINDEGR

No way! Neither would have survived on their own. Consolidation was necessary to return some rationale pricing and profitability.

hillrider

Rephrasing this, history shows that airlines have always managed to break their stated promises and deliver less on accumulated miles (devaluation).

There is no natural law that says that miles need to devalue: to the contrary, most State laws would make it a breach of contract (but of course airlines have bought "protection" from having to obey State laws!).

Ambraciot

This is as true as saying inflation is inevitable and unwavering with fiat currency, but deflation and appreciation exist to prove the rules. US miles were easier to get than AA miles before the merger. AA is still granting miles based on distance, but is giving premium pax significant bonuses to match DL and UA, which means AA is issuing the most miles per seat.

How far have AA miles fallen over the last 2 years? FTers earn and burn a ton and they tend to pile up for many of us when we can't find convenient redemptions. Before the explorer awards went away I viewed AA miles as worth $.019/mile, now I'm tempted to burn them at $.0112/mile on a hotel I'd otherwise book through a consolidator. Are other EXPs finding it easier to keep their balances trim these days?

cmd320

Both would have survived easily on their own assuming AA's trip through Ch. 11 had still occurred. Consolidation of one or two pairs may have been necessary. The rest should never have been allowed to happen. We now have an over consolidated oligopoly with far too little competition.

RealFan

I'm kind of in the middle on this. Although I understand and desire a free market, it is evident to me that the airline industry was a mess. There was overcapacity, no profits at all (in the aggregate) from inception to today (although that will change) and airfares remained very low on an inflation adjusted basis. It seemed like the old model just wasn't working except for those who took fair advantage of the inefficiencies.

However, today's model may have gone too far but I think it's too early to tell. I don't hold out high hopes that we're going to see some big increase in service levels but I'm pleased that AA and UA are ordering a bunch of new planes. I'm hopeful that the generational turn of client facing staff appears to be occurring as I see new and younger faces all the time on the planes and in the airports around the U.S.

The old way wasn't working except for passengers who were getting a great deal. The new way is to new for me to really criticize just yet.

Longboater

Consolidation was necessary as NW and CO were not viable long term without another merger partner, especially NW. US was the best and really only viable merger partner AA had among the big six. Whomever was going to merge with UA was going to get into a mess, hence one of the many reasons with UA/CO has been a disaster. The only airline that could have 'fixed' UA was DL. Who knows, if UA/DL had tied the knot, they could have renamed the combined airline Pan Am!

Superguy

I agree with this. Some carriers wouldn't have survived in the long term, so some consolidation needed to happen. I don't think US/AA ever should have happened though. There's a point where it becomes too much, and that was it.

I'm not entirely sure UA/CO should have happened either (and not saying that from the merger mess perspective).

The consolidation could have been ok if the barrier for entry for new competition wasn't so high. Foreign entities can only invest so much, and you have so much red tape to go thru. VX seems to be in the best position to grow into the next large competitor. It's steadily growing, but is largely a western/transcon carrier at the moment.

I don't think we need the craziness we had in the 80s and 90s, but it's also clear that consolidation has largely eliminated competition too.

We need a really disruptive carrier to come into the market.

Austin787

I agree some consolidation had to happen, but I think only 2 of the 4 mergers since 2008 should have been allowed. Most of the USA's capacity is now controlled by 4 mega airlines and they have given passengers a double whammy: higher fares and fees, and cutting services and frequent flier programs. Airlines are now making big profits; hopefully they will improve services over time, but I'm not optimistic especially for economy class.

NW would have been a better merger partner for AA - NW brought the Asia flights, AA brought Europe and Latin American flights. AA/NW would significantly expand AA's footprint in Asia. Yes, there is quite a bit of domestic overlap in the midwest (MSP/ORD/DTW) and south (MEM/DFW) but no different than NW/DL (MSP/CVG/DTW in midwest, MEM/ATL in south).

Superguy

Aside from the international, AA's been generally weak in the west, especially in the northwest. AS would fill in that gap nicely. But of the former carriers that could have filled in the gap? Really only UA or DL. Both would have brought Asia in more, and with a hub in either SLC or SFO, it would have had a stronger west coast presence.

NW would have only brought international in more, but still would have left it weak domestically.

LINDEGR

I agree with NW as the better partner (and better airline)! But other than London frequencies, AA didn't/doesn't have much more to offer than NW already had.

aa4ever

But wouldn't NW/AA have created less overall value than NW/DL? That merger created a global airline that is strong in Europe and Asia in a way NW/AA never would've been. Plus, I'd say overall less overlap.

cmd320

All of South America, Caribbean, transcon, southern US, and east coast? NW barely touched those areas on its own.