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Will US Airways Or American Airlines Business Model Take Lead In New Merged Company? [VIDEO]

Travelers Today       By    Antranig Dereyan

Updated: Feb 15, 2013 11:23 AM EST

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The tail sections of American Airlines (L) and US Airways aircraft
The U.S. government does not want the American-US merger to happen. The Justice Department and attorney generals from six states and Washington, D.C., are challenging the merger of American Airlines and US Airways, saying the $11 billion partnership would lead to higher airfares and less service for customers. (Photo : Reuters)

With the US Airways and American Airlines merger all but completed, the question becomes:

What exactly will happen to American Airlines?

According to USA Today [it] will in some ways very much resemble the American of old. It will bear American's iconic name. Its planes will wear its logo. It will be headquartered in American's home town of Fort Worth.

However, it will not be like "business as usual" as, current American Airlines' CEO Tom Horton will not be running the show.

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Everything will be overseen by US Airways CEO Doug Park and that brings up more questions?

Whose frequent-flier program will be implemented?

USA Today states that " US Airways has a generous upgrade policy and promotions to accrue miles, though it can be hard to redeem them for free tickets. American has a generous redemption policy but a difficult upgrade program."

That answer could be the decided factor in just how successful the $11 billion merger, creating the world's biggest airline will be when competing with rival carriers United, Delta and Southwest.

US Airways has had a "more spartan type of operation," says Henry Harteveldt, travel industry analyst for the consulting firm Hudson Crossing. In contrast, he says, American has catered more to the corporate flier who will pay more to sit in premium-class seats. "They have to find a new culture, and that might be a little bit from US Airways, a little bit from American, and a little bit that's completely new," he says, according to USA Today.

"With US Airways funneling passengers through its East Coast strongholds in Charlotte and Philadelphia married to American's broad international network, the new American should be a competitive match for United's and Delta's world-class size and reach," claims USA Today writer, Charisse Jones.

"We'll be at a scale where you have three large global airlines," Parker told USA TODAY. "There were two airlines that, through consolidation, had gotten larger than American and US Airways, and it was difficult for either of us to compete with them on the same scale," reports USA Today.

Another issue is figuring out which airline style will be the company model going forward.

"US Airways has been profitable by cutting amenities, and as an American passenger, I worry about the frills I've become used to becoming a thing of the past," says Gary Leff, co-founder of the frequent-flier community Milepoint.com.

He gives the example of, "US Airways, for instance, lacks the extra-legroom option in coach that American currently offers," adding, "It will be a real challenge for that culture not to undermine the service that American has become more known for."

In any case, this merger represents the new face of the industry--where airlines need to consolidate to stay afloat.

In 2008,Delta and Northwest joined forces; United and Continental linked up in 2010; and Southwest completed its purchase of AirTran in 2011.

With all of these consolidations bringing up issues for passengers, what about the workers?

"This should benefit both travelers and workers," James Little, international president of the Transport Workers Union, which represents workers at both carriers, said in a statement.

The deal still has to go through the proper channels to be approved, but all appears to be on course, with no roadblocks and once completed, all of these questions will be answered.

© 2014 Traverlers Today, All rights reserved. Do not reproduce without permission.
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