In the frenzied coverage of the merger between US Airways and American Airlines, America’s major media, for the most part, has not covered competition-reduction issues or examined possible consumer benefits and problems of this merger.
Literally hundreds of thousands of newspaper readers are frequent fliers and business travelers whose current airline transportation world this merger proposes to upend. Plus, corporate travel managers will be faced with significant changes.
Moreover, I have only seen one article from Reuters that focuses on this merger from the airport’s viewpoint. Let me remind you, most airports are supported by municipalities with bonds backed by the taxpayers and facility charges paid for by passengers, not by the two airlines in question — another consumer issue.
If I were the airport directors in Phoenix or Charlotte, I would be sitting on pins and needles and reviewing my expansion plans very carefully. Some of America’s smaller airports need to take a new look at the developing reality. Where AA and USAir were once competitors, they will no longer be. Get ready. Flights will be consolidated.
While US Airways and some American Airlines executives may be pleased, together with creditors and lawyers, the business travelers, corporate travel managers who negotiate with these airlines, and everyday Mom and Pop leisure travelers are facing significant changes to their travel world. Reservation systems, negotiated contracts, frequent flier programs and vacation plans so far have been ignored in most major media coverage.
What USAir and AA claim are benefits — more new routes, better frequent flier options and service improvements — are only half of the story. US Airways fliers who enjoyed a close relationship with United Airlines, both from a destination and frequent flier point of view, will be losing just as much as some passengers gain. What they offer as benefits with one hand they take with the other.
Labor strife is all but dismissed in these stories. The AA’s unions’ relations with AA management were so poisoned that they leaped at an opportunity to abandon the current management. Note also that after almost seven years US Airways and their management team has not settled the labor dispute betwen the old USAir unions and America West unions.
Rather than the upbeat merger story that has been presented so far, I feel it would benefit newspapers to focus on these major problems that will balance the corporate executive and creditor euphoria.
Travelers by the millions, both leisure and business, are being asked to deal with a major upheaval in the international airline system. Frequent travelers are being asked to re-program their frequent flier memberships and change the way they fly. US Airways elite members will be faced with more competition than ever from AA’s far larger frequent flier community.
What benefit will consumers derive after bonds are paid, unions get their raises, executives receive golden parachutes and a new management team is in place at American Airlines? Even the airlines themselves have not claimed any consumer benefits to this merger other than hard-to-quantify “service improvements.” And, if history from the United/Continental merger is a lesson, the projected “savings” may completely evaporate and become losses.
As for competition, the Consumer Travel Alliance has learned that when all the major airlines agree that a merger is good for “the industry,” consumers should hold onto their wallets.
After all, antitrust laws were written to protect consumers, not to facilitate industry consolidation. We need to take a hard look at what benefits this merger brings to consumers. So far, both US Airways and American Airlines haven’t made any claims.