MIAMI — By the end of 2015, another carrier will officially fade into the sunset, continuing a wave of consolidation characteristic of the airline industry recently. American Airlines has announced October 17 as the final day of operations for US Airways as its own entity. Afterwards, all flights will be assumed under the American brand, finally closing the book on a storied merger.
American and US Airways first announced intentions to merge on February 14, 2013, triggering a wave of concern that consolidation was shedding too much competition from the industry. The nation’s four largest carriers –American, United, Delta, and Southwest– now control over three-quarters of passenger traffic domestically. United paired with Continental, Delta with Northwest, and Southwest with AirTran, weeding out a number of airlines from the competitive pool.
An onslaught of lawsuits threatened the merger, but the Department of Justice eventually approved it, with a string of conditions, including requiring the new airline to divest some space at key airports, including Dallas Love Field, Washington Reagan, and New York La Guardia, to foster competition.
Although US Airways will fade from public visibility as of October, it and American have actually operated as a single carrier since April 8, when the Federal Aviation Administration issued it a single operating certificate. The two airlines have also already cleared a number of other hurdles, including combining reservations systems and agreeing on how to merge seniority lists. As such, the final US Airways flight will likely hold more symbolic importance than operational significance, although some operational and technological tasks do remain, such as flipping the switch on synchronizing the two reservation systems. While the public will experience a single airline for the first time, the two carriers have been operating largely in unison for some time now.
Nonetheless, the new airline will continue to evolve, even after it repaints all of its aircraft. A key point of discussion that remains to be played out is how American will deal with its unusually large number of hubs. One benefit of a merger from the airline’s perspective is synergies from economies of scale. Some believe that American will choose to downscale a few of its strongholds, highlighting Phoenix, Charlotte, or Philadelphia as potential victims. Hub airports function as key economic engines, as a downsizing could significantly maim a city, let alone inconveniencing its locals.
While some worry that trimming the playing field will cut competition, the merger also benefits consumers in the sense that the airline’s customers enjoy a broader network. Additionally, many supporters of the merger claim that one financially stable airlines bodes better competitively than two struggling airlines. They also point to historically low airfares, at least when analyzed over a longer time span, to assuage fears of upward moving airfares. Fares have tricked upward since the depths of 2008, which pushed many carriers into troubled and forced the introduction of many new fees, but remain historically low.
The airlines also boast little route overlap, meaning only a handful of market pairs directly lose a competitor.
US Airways maintains a history of consolidation itself, even before it revealed its tie with American. It merged with America West in 2005. Its previous history, ridden with some turbulence, greatly shaped the way the new airline laid out the merger, trying to side step prior mistakes. America West and US Airways were burdened for years by a contentious blending of seniority lists.
Kerry Philipovitch, American’s senior vice president for customer experience, heralds the coming day as a milestone for the new airline and looks forward to a more seamless experience for customers, who will experience a more consistent product: “The travel experience will be seamless, so they will be able to check in at any American counter rather than having to know to go to a US Airways counter,” she describes.
Aviation enthusiasts might want to take note of two US Airways flights: US 434 from San Francisco to Philadelphia, and US 496 from its former home base in Phoenix to Denver. These two represent, as of now, the last two planes which will depart striped in the US Airways colors, although American does caution that schedules may change. With late evening departure times, each flight set to go at 9:55 pm locally, US Airways will literally fly off into the sunset and put finality on years of operation that drew in numerous employees and millions of customers under its wings.