In today’s travel industry, delays, overbooking and cancellations have become common place. Today there are many airline carriers to chose from but only very few have stood the test of time and and maintained their profitability By Providing better service and less obstacles to swift traveling, companies like United and American Airlines have grown into brand names if you will. However, when large carriers like American Airlines expand and grow, the quality of their service is potentially at risk.
In March of 2013, congress approved one of the largest mergers in the airline industry’s history. It agreed to the merger proposition for American Airlines to combine with U.S. airways making it the largest airline carrier in the world with over 6,700 daily flights to 336 destinations and a little over 10,000 employees. Now the common idea with large mergers such as this, is that quality will suffer as the company become larger. So by analyzing some potential outcomes of the current picture of American Airlines and what may happen with the pending merger, we can see where things might change.
The amount of miles earned by U.S. airways fliers will not be lost in the merger but will be transferred in a one for one type of exchange into American’s AAdvantage program making it the largest airline miles club in the world with approximately 100 million members.
Another concern fliers have is the difference in in flight products offered. For example, American Airlines offers meals to fliers on flights less than two hours long, while on U.S. airways the flight must be longer than three and a half hours long before you will receive a meal. With the merger, American Airlines fliers are quite worried about the amenities they might lose when flying on American.
Flying could also get more expensive, with so many routes under the American flight portfolio, there is a strong possibility for a fare hike on many different routes where there is little to no competition from other airlines. The main hope for this merger according to executives at American Airlines is to come together and offer more fliers a better experience with seamless travel to more destinations. It seems with the intended proposed plan that American will actually improve on the delivery of a quality service to a larger group of customers.
In many instances, large mergers such as this often have negative affects on the companies involved and they often lose much of their clientele as the quality of the product or service is diminished However, in this case it appears that the intended plan would only serve to benefit both groups and their clients, as U.S. Airways customers would see an improvement on departure and arrival times with access to more daily flights, as well as an increase in the quality of the in flight services currently offered on many American flights, and the American airlines customer would see a significant increase in the number of destinations offered along with a much more flexible array of flight times with the increased number of daily flights as well. It would seem as though this merger would make American Airlines the most competitive and profitable airline in the industry which will be determined for certain when the merger takes place at some point in the projected 3rd quarter of 2013.
Works Cited
http://www.nbcnews.com/business/court-approves-american-airlines-us-airways-merger-2B9117378
This is a very interesting article and it relates to me because I travel a lot. With this being said I also would worry about losing the amenities when a more expensive airline merges with a cheaper one. Although I always bring my own food on the plane with me I do like having the option of having a hot meal even if the trip is less than two hours. This can be costly to the airlines, yet it can also bring them more business as some airlines do not offer this. It made me think where will American airlines go from here and if its profits will rise as much as they are expecting.
While I agree with the benefits you mentioned, I think that both airlines will suffer. With one cheaper airline and one of a higher quality, it seems inevitable that there will be some type of meeting in the middle. US Airways will improve, but at the same time, American Airlines has the potential to lose amenities and other special features.
I enjoy traveling and have flown with American many times; however, i have had quite a few bad experiences. So lately I’ve been flying Southwest. It’s true that there is always a risk that the merger will cause a loss of quality. Although, maybe there’s a chance for improvement. Perhaps American would adopt some US Airways policies (the positive ones) and strive to offer higher quality options for travel. And the merger gives them an even bigger advantage because of them offering more flights to more locations.
The merger between American Airlines and US Airways should cause some concern amongst their customers. The combination of both companies certainly increases the risk and responsibilities associated with each airline. The removal of another competitor can also cause concern for rising price. Like other posters have also mentioned, some customers will be left worrying to see what services will remain and what will be changed due to the merger. Another concern is the longevity of the company as it now tries to manage two airline companies in a volatile business. Certainly the companies merged and provided plans with the hope to maintain or improve the quality of their services. It is to be seen wether the new company will be able to successfully manage its new responsibilities.
In a merger there is always one side that is going to have to scale back on their amenities and that isn’t good travelers. I agree with all of your benefits you have listed, but at the same time, I also think that the bad is going to outweigh the good. With the possibility of higher fares, more and more customers will be moving their business to Southwest where the lowest fare is offered. The quality that will be offered is the main concern and we’ll see if they can work everything out. I hope all of the kinks will be worked out and a great airline will emerge.
Good post.