Via The Dallas Morning News, it looks like an American and US Airways merger will be announced tomorrow. Apparently the details will be as follows:
– 72 percent for AMR creditors and other interests, 28 percent for US Airways shareholders.
– Doug Parker will be the chief executive officer.
– Tom Horton will be the non-executive chairman, for only a limited period before he departs post-merger.
– The plan is to announce the deal in the pre-dawn hours Thursday, followed by a 7:30 a.m. CST call with the analyst community, a Dallas/Fort Worth International Airport press conference in mid-morning, a 1 p.m. Dallas/Fort Worth Airport presentation to AA employees, with the video and audio broadcast to other locations.
– After that Parker and his entourage will return to Phoenix to meet with US Airways employees.
About two weeks ago I shared my thoughts about how a combined airline would look, so check out that post for my predictions. Up front it’s worth noting that you have nothing to worry about in terms of your miles and status being “safe.” When a merger happens your status and miles will all carry over to the new, combined program, and it may turn out to be a net positive for many frequent flyers.
One thing that’s worth pointing out (for all the doom and gloom otherwise associated with mergers) is that short term the impact of the merger will be extremely positive for frequent flyer members. I suspect within a couple of months at the latest, members of both frequent flyer programs will be able to transfer miles freely between their accounts in both programs and also match status. So even before they’re officially one airline, you’ll be able to be treated similarly on both airlines.
It goes without saying that the new airline will be a member of OneWorld, and there’s no timeline yet for US Airways leaving the Star Alliance. As a result it may very well be possible that by transferring points between programs you’ll be able to redeem your US Airways miles for travel on OneWorld, and your American miles for travel on Star Alliance. Short term that’s a huge positive, and would make points in either program the most flexible of any airline. It’s possible that US Airways will be in Star Alliance for another six or so months, or it’s possible they leave within a few weeks.
Long term it’s anyone’s guess how the combined airline will look. There’s no doubt that changes will be made to the combined frequent flyer program, hubs will be cut, etc. I’m sticking to what I said in my previous post, and think that for the most part the merger won’t be that bad in terms of frequent flyer program cuts. I think we’ll see four elite tiers, elite mileage bonuses cut for the mid tiers, and unlimited domestic upgrades for elite members. I think the big question is what will happen to the eight annual systemwide upgrades that come with Executive Platinum status. I’d bet good money they’ll be tweaked, whether it’s giving members fewer upgrades, or adding further restrictions.
Last week I wrote a post sharing my thoughts about whether or not it makes sense to buy Chairman’s Preferred status, given that US Airways sells it for just $2,999 if you’ve have any elite qualifying activity on your account. To follow up on that, I think that it could very well make sense now. Keep in mind that the status would only be valid through February of next year, though if you wanted to “jump start” your way to top tier status with either airline, that’s not a bad cost for doing so. You probably won’t be issued any systemwide upgrades, but I’m sure it’ll still interest some. I wouldn’t be surprised to see US Airways cut their buy up offers in the near future, or at least increase the cost, so I wouldn’t wait too long if you’ve been considering it.
So how’s everyone else feeling about this?