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Airline Mergers, Airlines, American Airlines, Uncategorized, US Airways

First thoughts on the just-approved AA-US Merger

Not sure I like this. In fact, as a relatively experienced air traveler, pretty sure I don’t.

Need some background on the approval today? Try this NBC News story on the Justice Department coming to terms with American and US Airways.

US and AA planes showing their tailfin livery

US Airways and American Airlines planes. Click the image for the official “New American is Arriving” website.

I’m torn in a few directions on it.

1. The Obama admin made a big stinking deal about blocking it, which I felt was unfair. Especially after all the airline and other near-monopoly mergers approved in recent years, like the cellcos/tellcos.

In the general case, I don’t like the Federal government telling private business what to do (healthcare is an exception, I’m a raving socialist on it who doesn’t like Obamacare because it is NOT enough of a government takeover). But if they had a point about there being too much post-merger consolidation, then why settle for such trivial reductions. Other than Reagan National in DC, the 2 gates at each of the other legacy-AA hub or focus cities are minimal. American practically owns Dallas-Fort Worth DFW airport, and US Airways probably has only 2 gates there. If you wanted to force DFW open, you would make AA give up a lot of its existing gates as part of the trade for combining with USAirways-controlled Charlotte and Phoenix. And would strip some off them too.

2. I don’t see the synergies of route expansion the way the Delta-Northwest and the United-Continental mergers had. Delta had practically nothing to Asia while Northwest was one of the two legacy US carriers that had rights not only to Asia but to run a hub in Japan and run flights between Asian countries for local traffic. United has the same thing in Japan, having bought the legacy Pan Am Asian routes (they and NW were the 2 US carriers allowed post-WW2), which strengthened what Continental had. CO had a NYC-area megahub at Newark, and a central-south hub at Houston, both big holes in United’s route map, while UA had western hubs (Denver, San Francisco, LAX) that Continental never had (or in the case of Denver, gave up two decades ago). Continental added a lot of routes to smaller European cities nonstop from the USA, instead of United having to hand off all European passengers to Lufthansa at Frankfurt for any cities other than the big ones UA served nonstop. So these mergers made real sense, even if they didn’t get executed smoothly.

What does US add to AA? I don’t see it. A few more Caribbean islands, but AA could re-expand back from what used to be their Puerto Rico hub. AA doesn’t really need the Phoenix hub, given it has Dallas and Los Angeles to cover the Southwest. US closed its Las Vegas hub shortly after merging with America West (actually a takeover by America West, and that merger from 8 years ago still not complete as far as pilot and other work groups go.) US gets AA’s routes to a handful of places in Asia, but not many because AA barely serves Asia, and US adds nothing there. US’s Charlotte North Carolina hub is great, but AA has repeatedly failed at making the former Raleigh-Durham hub work even as a major focus city, so getting a southern mid-Atlantic hub doesn’t seem to be a win.

3. Both airlines have a recent decades reputation of bad customer service. Dating back to when AA still called themselves “Something special in the air”, I used to call the “Something awful on the ground” from their really bad service on irregular operations (canceled or delayed flights, overbookings, missed connections, etc.) I have seen no evidence they are any better, and plenty that they are just as bad or worse. Meanwhile US is dependably grumpy and disorganized.

To be fair, I recently was on three fairly long American flights. One from Lima, Perú to Dallas with a connection on to NYC-Newark. Then a couple of weeks later from Boston to Miami. (Part of an AA AAward from the San Francisco Bay Area to Gainesville, Florida. Went OAK-SEA-BOS (Alaska Airlines) BOS-MIA-GNV (AA and American Eagle. Really long day.) Service on all three AA legs was good, and the Eagle ER145 from MIA-GNV was, well, a BarbieJet/JungleJet of the smallest type. But for a change the AA regional FA was not a raving control freak, so there’s that.

But absolutely nothing stood out about the flights, nor the ground service. “Less screwed up than postmerger United” is faint praise, and the New American is going to be screwed up for years anyway. While starting from a base of being two airlines known as lousy for regular non-status travelers (me nowadays) and low-level elites.

4. I like it in that it preserves at least most of the jobs of US Airways people. US was going to fail, even though they are really the acquirer here, being AA’s white knight to bail them out of bankruptcy. US was just too small to succeed. Though there will be layoffs, as part of a giant new-AA, most of the people’s jobs will be saved. Which is important on a human and communities level.

5. I expect their call centers will continue to be excellent. Though US has offshored some, they are to countries and to teams that have a solid command of colloquial American English, know the US geography, know the US Airlines policies, and are very helpful and friendly. American Airlines has some of the best call center agents in the business, and their international reservations and AAdvantage Reward Travel staff are superb. That’s coming from highly-critical me, who also has never had any elite status with American nor any of their oneworld alliance partners, so I only get the same agents as “Ma and Pa Kettle take a flight” get. Far better than the phone service for non-status customers at Delta and United.

6. I’m worried about the AAdvantage program, which is both the first and one of the best of the frequent flyer programs. AA has great award availability and mostly good policies for award travel. They have a reputation for treating their elite members well. US has been far lower-rated on both awards and elite service, with recent years devaluations of both. US Airways management is running the new airline. Do the math.

I wish the New American and all its people well. Living now in Uruguay, where AA is the only nonstop US-Uruguay airline, and its Buenos Aires, Santiago, and Sao Paolo flights with connections from Uruguay are also viable routes, I obviously cannot always avoid American Airlines. Though the one time I tried to take them to Uruguay, they turned back over Havana and then called the cops on people who asked for the very discounted hotel vouchers their phone agents were promising at the very same time! So I am not at all enthralled with taking them again, despite my recent good and non-police-incident flights! I expect to be going back to the States next in or around February, and will look at AA.

Look. Didn’t say Take.

About Mark Mercer

Expat aging sometime-ski-bum former corporate tool. Currently living in the beachside aging resort town of Atlántida in Uruguay. Sometimes skiing and teaching in Breckenridge, Colorado, USA. Location and velocity cannot be simultaneously observed.


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