Matthewonlive and let's fly

US Airways and American Merger Announcement Imminent?

I am hearing some rumblings tonight that an announcement is coming as early as Monday morning that US Airways and American Airlines may officially tie the knot. With news on Friday that American Airlines' labor unions have thrown their support behind a deal with US Airways, this should come as no surprise.

Although I repeat this is only rumor, it appears the combined airline will take the American Airlines name, maintain its headquarters in Fort Worth, and be run by US Airways CEO Doug Parker. Apparently, Parker has caved into all AA labor demands and will attempt to use the AA labor contract to finally bring an end to the labor standoff between US West and US East. Recall that although America West and US Airways "merged" in 2005, the two carriers still essentially operate as separate airlines. Operating certificates, seniority lists, and routes remain separate and despite nearly seven years of negotiations, no end to the impasse is in sight. Using AA labor contracts will still require approval from both sides of US Airways, but presents a path forward that the airline has repeatedly failed to chart.

I have no information on which alliance the combined carrier will align with, but the odds are heavily stacked in favor of OneWord. I think there is about zero chance that a major alliance would cede their only North American carrier. While I do not even think it will be much of a fight, you can bet that OneWorld will do just about anything to keep the new AA from defecting to Star Alliance.  

For frequent flyers, nothing will change now and I suspect the popular American Airlines AAdvantage program will remain. That is months away, though, so you do not even have to worry about that quite yet.

Finally, it merits noting that a merger will have to clear regulatory hurdles, and although I think AA/US will ultimately succeed, Congress, even without James Oberstar, may pose an obstacle.

This could be an interesting day. 

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Comments

#1
Nathaniel April 23, 2012 at 01:31 am

From: https://public.alliedpilots.org/apa/AboutAPA/APAPublicNews/tabid/843/ctl/ArticleView/mid/1983/articleId/1097/The-rebirth-of-American-Airlines.aspx

The New American Airlines

First and foremost, the combined carrier will be branded American Airlines, based in Fort Worth Texas and headquartered at CentrePort. It will be comparable in size and scope to Delta and United, with a robust domestic network capable of supporting significant international expansion. American Airlines’ relationship with oneworld will be maintained and strengthened. All of American Airlines’ aircraft orders with Boeing and Airbus will proceed. The former US Airways route system will be realigned with the American Airlines system to add more cities, more markets and better frequencies. The new American Airlines, under a lean, energetic and highly capable management team, will be able to compete on an equal footing to win back high-value customers. On the East Coast, which is the largest and most lucrative airline market in the world, American Airlines will go from No. 5 to a strong No. 1. In the Midwest, we will go from No. 4 to No. 1. In Miami, our dominance to South America will be enhanced by stronger East Coast traffic flows. For the first time in years, American Airlines will be in a position of strength in Chicago.

So it sounds like they have already chosen oneworld..

#2
John April 23, 2012 at 03:16 pm

Mathew I thought you are a lawyer? The is ZERO percent of this happening at this pt. American has exclusive negotiating rts to a deal until Sept under the bankruptcy agreement. From what I've heard US Air has not even negotiated with AA so far. US Air has only negotiated with the unions. BIG DEAL!! AA holds the cards.

#3
Matthew April 23, 2012 at 05:42 pm

@John: AA can say no until September, but that doesn't mean they can't say yes. And from what I've heard, AA and US management have been talking. So we'll just have to see, won't we?

#4
UPGRDer April 24, 2012 at 04:34 pm

@Matthew I think you're on the right track with this one. When flight attendant groups are already making it clear they want solidarity and all work groups support this merger, it certainly won't have the same result as the HP / US merger. (Over 10,000 members strong in one week, in support.) AA and US are already flying to each other's hubs and seeking out best gate availability. Doug Parker couldn't be happier:

'All of you have heard me talk about the benefits consolidation has created for US Airways and our industry. You have also heard me say that US Airways does not need to merge with anyone, as evidenced by our team’s outstanding results. That is still the case, but after studying American Airlines’ current state and their future plans, we have concluded that a merger with American, while they are undergoing their bankruptcy restructuring, represents a unique opportunity that we should not ignore. These beliefs are shared by the three American labor unions and we are delighted to have their support. Like us, they recognize the potential of a merger to improve the current and future careers of both airlines’ employees.'

I'd suggest following a reporter, @JasonWhitely, who's reporting from the bankruptcy courts as we speak.

#5
John May 3, 2012 at 12:15 pm

Mathew-Where is this merger you predicted would be announced on Monday morning???????? On the US Air conference call Doug Parker himself admitted there has been NO DIRECT TALKS WITH AA.

@UPGRDer-"AA and US are already flying to each other's hubs and seeking out best gate availability." TOTAL NONSENSE.

#6
Matthew May 3, 2012 at 12:42 pm

@John: What's your point, other than to gloat? I would deny direct talks at this point too...

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