The American Airline Merger
Tom Dougherty, CEO – Stealing Share
13 November 2013
The truth about the American/US Air merger
“This is an important day for our customers, our people and our financial stakeholders. This agreement allows us to take the final steps in creating the new American Airlines. With a renewed spirit, we are about to create the world’s leading airline that will offer, along with our oneworld partners, a comprehensive global network and service by the best people in the business. There is much more work ahead of us but we’re energized by the challenge and look forward to competing vigorously in the ever-changing global marketplace.” – American Airlines CEO Tom Horton, and incoming chairman of the combined company of American Airlines and US Airways.
In the coming months, you’ll be hearing the spin about how the American Airlines/US Airways merger will be better for customers because the new airline will, well, just be better.
The merger is flat-out bad for travelers. The loss of competition means prices will go up. There will be fewer options. And I don’t believe for a second that the newly merged airline will be improved.
Although, now that I think about it, this is the merger of the two worst major airlines in the world. So I guess there’s no place to go but up, right?
Snuck into the agreement with the US Justice Department was this little nugget: The airline must keep its hubs at Charlotte NC, Chicago, Los Angeles, Miami, Philadelphia, Phoenix and JFK Airport in New York City for three years.
Wow. Way to put the hammer down, Justice League! In three years, the new airline will basically be able to do whatever it wants. And that will be to screw you over as much as it can.
I know the Justice Department got into a pickle here, having already approved mergers for United/Continental and Delta/Northwest. This was pure politics even after the Department filed a legal challenge to the proposed merger months ago.
So, while it was inevitable that a deal would be done, don’t believe it for a second when you start hearing how this merger is better for customers.
It’s pure nonsense.
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