U.S. Airways—which has a Philadelphia hub—is nearing completion of a merger with American Airlines.
The Fort Worth Star-Telegram reports:
A potential merger deal between American Airlines and US Airways remained in a holding pattern Monday, with an announcement possible Thursday, sources said Monday.
Still unresolved was AMR Chief Executive Tom Horton’s role in a combined company, as well as his compensation package. He reportedly is being offered the title of nonexecutive chairman for a limited time.
CNBC examines what the deal will mean for flyers:
Opinions are mixed among industry experts as to whether a merger would bring a correlated hike in airfares.
“While most air travel pundits rightly note the minimal overlap between the two airlines route systems as a reason for no concern for higher prices, I don’t share the same opinion, as this guarantees these two airlines will never compete in the future,” said Rick Seaney of airfare monitoring site FareCompare.com.
But other industry watchers aren’t so certain.
Forbes’ Peter Cohan is an unabashed critic of the proposed merger:
The history of such mergers is that consumers end up paying the bill. One way they will pay is in the form of American’s delayed and cancelled flights — such as the ones last fall. By combining American with US Airways, which in my experience also had its share of delays and cancellations (“we dubbed it Useless Air”), it is hard to see how the combination will deliver better service.
But USA Today’s editorial board is firmly in favor:
For years, it has been clear to many airlines watchers that the industry was inevitably heading toward an equilibrium of three major hub-and-spoke carriers. Any more would mean at least one would be struggling at any given time. Any fewer would not be tolerated by the Justice Department’s antitrust division, which usually lets an industry drop from four competitors to three, but equates a drop from three to two with abusive practices.
The three survivors, meanwhile, will continue to face stiff competition from point-to-point airlines such as Southwest, and niche carriers such as JetBlue and Virgin America, restraining fare hikes.