American Airlines and US Airways... Which Alliance?


#1

It has come to my attention that American will be announcing a possible merger with US Airways. Correct me if I am wrong, but I think I noticed that there was a possible merger before this announcement. When American revealed its new livery, I thought this was a sign of a possible merger with US Airways. What do you guys think?

Getting that out of the way, if American and US Airways merge, will they be apart of Oneworld, or Star Alliance. Since they are keeping the American name, I bet they’ll stay in Oneworld. What do you guys think?


#2

THere is no merger finalized.

However, if they were to merge, they would be in Oneworld. The new airline would compete far too much with UA for them to coexist in Star.

Also, AA has joint ventures with BA/IB and JAL, which are in oneworld. US Airways has no joint ventures.


#3

Part of the agreement that has leaked so far is keeping the American name and HQ is in Fort Worth. Talked to a gate agent at ALB today and other part is keeping US as management and not AA.


#4

Management consists of thousands of people. A common misconception (even among pilots, FA’s, airport employees) is that a handful of executives in some ivory tower run the airline. Even major decisions like where to fly and what aircraft to purchase are often delgated fairly far down the chain. More minor decisions like how the website should be designed or what kind of napkins should they buy or how much to charge for Reno-Dallas fall further down the chain. There would be people from both companies out of simple necessity.

  1. The new carrier will be much bigger. US management simply doesn’t have enough people to run the entire operation.
  2. Many AA employees have much more experience with the AA operation than any US employees do. For example they would probably run on SABRE and use the current AA.com as their combined website.
  3. Not every Tempe-based US employee will want to move.

When CO and UA merged, they basically defined every management role that they would need in the new company then had current employees of both companies who wanted to stay apply for those positions and they were filled in hierarchical order (new top level execs picked new VP’s, new VP’s picked new Directors, new Directors picked new managers, new managers picked new analysts/specialists).


#5

Yes. Management is lots of people. No “misconception” on my part. Please compare the US/AW merger and the company it is now vs. UA/CO. The US/AW merger was a debacle. I think the DL/NW went pretty smoothly and while the UA/CO merger had some kinks, nothing was as bad as how Tempe screwed up with their merger. When I say US management will run the company, what I should have said is that Doug Parker will run the combined company. A few years ago I would say that would be a bad thing but I think he’s learned from his mistakes and there’s some hope the combined US/AA would be a pretty good operation.

Yes, Sabre is in the disaster that is Shares or whatever it was called is out. Regarding seniority, I would debate that… Remember the number of people out east that were Piedmont, Empire, Allegheny and Mohawk that are still with US. Not to mention PSA folks from the west. That’s gate folks and such. What I understand about the pilot end of things is that senior US and AA pilots are pretty close. The poor AW pilots are the ones that are going to suffer.


#6

I’m sure the PHX domicile Airbus group will be “fenced” for former HP employees.

One thing that AA isn’t used to will be that the new group will have LOTS of contract carriers:

Mesa (Fee for Departure), 2 hubs
Skywest (fee for Departure, two separate contracts, 2 hubs)
Trans States (At risk)
PSA (wholly owned, 3 hubs)
American Eagle (wholly owned)
Chautauqua (Fee for Departure, 2 contracts, 3 hubs)
Republic (Fee for Departure, 2 hubs)
Piedmont (wholly owned, 3 hubs)
Air Wisconsin (fee for departure, 3 hubs)


#7

I wouldn’t be so sure… you really think that MOU or agreement or whatever that was struck between the AA pilots and US would have anything thing of interest for the HP pilots??? Hell, the HP and US pilots are still on separate contracts…


#8

Hence why there would be a fence. HP pilots would never agree to a new contract allowing any sort of integration if there wasn’t.


#9

Local TV station is reporting that a tentative agreement has been reached. Another is reporting that a hangar here in Tulsa has been cleared out and chairs have been brought in.

http://www.fox23.com/news/local/story/Reports-American-Airlines-US-Airways-reach/V9OvS2XUJUyGpyR69zlFnA.cspx

http://www.newson6.com/story/21143666/sources-american-and-us-airways-boards-set-to-decide-on-merger


#10

It’s official, Oneworld is it.


#11

Sigh…


#12

Not for nothing, but everyone knew it would be OneWorld.

AAL was a founding member of that team, and there would be no way that they would, via AWE, be subservient to UAL/COA in Star Alliance. No way was that going to happen. AWE would definitely leave Star Alliance if the deal went through.

What this now does is give AAL more of a presence in Europe and possibly South America, where AWE through USA has traction. How much that will penetrate is the question.

BL.


#13

Agreed, no surprise.
I think the big question is Asia. One Q&A I saw did ask that question and all that they said was AA is already going to add DFW-Seoul anyway.


#14

This does not really affect them in South America - US Airways only had 2 routes to South America.

US Airways is a bigger player in the Caribbean, but AA already flies to most of those places anyway, if anything it removes a big competitor.

It does give them access to more small destinations in Europe. But I have a feeling that many of those actually depended somewhat on Star Alliance members, so it will remain to be seen how many will survive. Also, many were viable because of US’s lower cost structure. However with the new AA cost structure some of these will be viable even at their pay scales.

The main thing that it gives AA is better access to the small southeastern markets through CLT, which if AA wanted to serve either had to do so through ORD or DFW (which were longer flights) or through LGA/JFK/MIA which had limited feed opportunities and were also somewhat long and in two cases, slot restricted. It also gives AA a Northeastern hub in PHL that isn’t slot restricted (despite referring to LGA and JFK as hubs, AFAIK no AA domestic destinations that were served from JFK or LGA were only served by one of those airports - they all had ORD, DFW, or MIA flights. AA’s operation at LGA also sucks for connecting traffic because of their split operation across two concourses that requires reclearing security.

It also gives AA a big presence in Washington DC, which they had given up as part of the cornerstone strategy.

It also helps solidify their position in Mexico - both were far behind UA among U.S. carriers to Mexico. The combination of the nearby hubs in both PHX (covering western Mexico) and DFW (covering eastern/central mexico) to reach Mexico and the big O&D Markets in ORD and JFK should make the new AA a lot stronger in Mexico.

Keep in mind that in many ways US is acquiring AA though. From their perspective, it gains them access to the New York market, a huge hub in DFW, and those huge Joint ventures with JAL and British Airways.


#15

So I had heard that US was going to announce new routes this year in Latin America. Nothing I could footnote however. Just water cooler talk with one of their International Station Managers. Does all that stop now? Or will they roll out the new routes regardless? I imagine it does no good to announce existing AA routes, unless they had holes they could patch in the route map. Are the two airlines able to talk now about rolling out new routes that would then be part of the combined AA?


#16

Good question, in the interview I saw they said there were still quite a few nuts and bolts stuff to work out. I would imagine route planning would be one of them, but if they already have the fleet and personnel things in place for a new route I think it would go ahead.


#17

Any indication of what will happen to the USA PHL-TLV route? Will AA take that on? Are there still unresolved issues about how AA pulled out of TLV some years back?


#18

I imagine that decision will be put off as long as possible.