This morning I received an email from American Airlines announcing that their merger with US Airways has legally closed. While this is a major event in the process of folding US Airways into American Airlines, it will still be a while before US Airways fades into nothingness.
From initial announcement to complete integration, an airline merger takes years to complete and is filled with countless headaches along the way. That means it will likely be 2015 before US Airways is fully consumed by American.
While I wish the best for American and US Airways in their merger, as a Delta Platinum Medallion I am most concerned that the number of nationwide legacy carriers has been reduced to three, resulting in reduced competition for our dollars. With less competition, prices are likely to increase for airfares to many destinations throughout the United States.
For example, on my current flight from MSP to DCA, a direct flight on Delta was over $500 while a flight on US Airways was only $300 for similar flight times. Will this be the case when the merger goes through? Most likely not. When Delta merged with Northwest, my average ticket price from MSP to LAX went up by $300 a ticket. Going from around $250 round trip to over $550.
If US Airways is similar to Northwest in the scenario above, and American plays the role of Delta, we will likely see flights between MSP and DCA increasing by hundreds of dollars round trip. No thank you!
While the effects of the merger remain to be seen, I think it is safe to assume that flights will not be less expensive as a result of the combining of airlines.
Short term, I plan to mitigate some of that risk by padding my US Airways balance through credit card signup bonus offers. As Gary mentions, these miles will be usable on the OneWorld alliance beginning March 31, 2014. Fortunately I still have time to work out a long term solution.