Given the likelihood of a merger of American Airlines and US Airways, the question that frequent fliers always ask is timely again, in light of previous mergers in recent years between Delta Air Lines and Northwest Airlines, United and Continental Airlines, and Southwest Airlines and AirTran Airways.
First, some good news from Brian Kelly, the proprietor of ThePointsGuy.com, a Web site popular with frequent fliers concerned about mileage award benefits. After a merger, “all of your US Air lifetime miles and all of your American Airlines lifetime miles will combine,” he said. “So that’s a benefit. If you’ve got a small amount of US Air miles and a decent amount of American miles, all of a sudden you’re going to have this one new combined balance.”
Indications are that the far larger and more popular American Airlines AAdvantage mileage program will prevail in a combined airline. So elite-status qualifying miles on US Airways will also shift into AAdvantage, which is another potential advantage, he said. Since US Air has four ranks of elite status and American has only three, it’s also likely that US Air members will find an easier path to bonuses and standard upgrades when their elite-status mileage moves to AAdvantage.
“AAdvantage was the first frequent-flier program, and they have a great team running it,” Mr. Kelly said. “I really hope they won’t dismantle that and try to go with the US Air Dividend Miles program, because that program is not nearly as good.”
Of course, airline mergers are aimed at reducing costs and improving efficiency — not customer convenience. One result of the mergers has been a reduction in airline service, especially in midsize and smaller markets. That means fewer seats available for mileage award tickets and more elite-status customers competing for fewer upgrades.
Today, American and the much smaller US Airways have a combined 6,500 daily flights. But experience from past mergers, as well as the current trends in reducing airline capacity, suggest that a combined airline will have fewer daily flights.
On the other hand, there are not a large number of markets in which American and US Air directly compete for originating passengers (rather than connecting ones). And let’s not overlook international routes, which is where the major airlines have been concentrating in recent years.
While airlines are now significantly cutting capacity on trans-Atlantic routes, demand for flights to Asia is growing, along with demand for Latin America. It is generally assumed that a combined airline, still flying under the American name, would maintain American’s current membership in the Oneworld global alliance. Members of the US Airways frequent-flier program would then have new access to award tickets and elite benefits on the vast route network of American and its 11 Oneworld partners, including British Airways, Cathay Pacific and Qantas.
But US Airways belongs to the bigger Star Alliance, whose 27 member airlines include United Airlines, Singapore Airlines, Lufthansa, Air China and Air Canada. So a merger would make it challenging for frequent fliers to sort out widely varying mileage award rules, including various fees, for alliances and partnerships.
It takes a while for a merger to become operational. “It would take at least a year, probably closer to 18 months, for full integration,” Mr. Kelly said. So there is plenty of time to use existing miles or, conversely, add to existing accounts in anticipation of the combination. Consider, for example, a US Airways MasterCard promotion that has a sign-up bonus of 40,000 miles, and offers additional double miles on US Airways purchases, Mr. Kelly noted. Those award miles would ultimately transfer to the new airline.
A merger entails “a lot of technical issues,” Mr. Kelly said, adding that while the Delta-Northwest merger went fairly smoothly for frequent-flier members, the more recent United-Continental merger still hasn’t fully smoothed out wrinkles in combining two frequent-flier programs.
Along with Mr. Kelly’s Web site, incidentally, there’s good information and a lively discussion of various airline frequent-flier mileage programs on the mileage forums at FlyerTalk.com. As mileage programs merge, rules for award tickets and fees and various elite-status upgrades and bonuses are in flux, and keeping track of the details, while a real chore, can be useful.
I always maintain that the best value in your frequent-flier miles is award tickets for international travel. With an American-US Air merger and the machinations over alliance partner policies, that will require even more attention to detail.
“American in the last year has really scaled back on the amount of advance award availability on their own flights,” Mr. Kelly said, but with greater availability on international flights like those operated by its partner British Airways (which might include a fee of up to $350 one way). US Airways also has “a lot of partner award availability, but not as much on their own flights,” he said.
“After they sit down and work out all of their synergies, the bottom line will be that international capacity and award availability will be cut,” Mr. Kelly said. “I don’t see award availability improving.”
On the Road: Squeezing Frequent Fliers Is a Likely Merger Outcome
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On the Road: Squeezing Frequent Fliers Is a Likely Merger Outcome
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On the Road: Squeezing Frequent Fliers Is a Likely Merger Outcome
