The long-rumored merger between American Airlines and US Airways appeared to move a step closer early this month when Tom Horton, American’s chief executive, announced that the two carriers were in “discussions” and that a decision would be made “within a matter of weeks.”
A combination of American, which is expected to emerge from bankruptcy protection early this year, and US Airways would create the nation’s largest airline as measured by number of employees, and the second-largest in terms of operating revenue. It would also complete a cycle of industry consolidation that has defined the past decade in commercial aviation, with Delta Air Lines merging with Northwest Airlines, Continental Airlines joining United, and the latest corporate coupling between Southwest Airlines and AirTran, among several others.
Neither American nor US Airways would comment for this column, citing nondisclosure agreements relating to a possible merger that each has signed. But Aaron Gellman, a professor of transportation at Northwestern University, says he believes that the two parties remain a long way from an agreement, and that ultimately, a deal will happen only “if Wall Street wants it.”
Faced with the prospect of yet another airline merger, passengers didn’t mince words. “Bad plus bad equals bad,” said Lazaro Fuentes, the co-founder of a software developer in New York.
A closer look at both airlines’ performance since I wrote about the possible combination last spring illustrates Fuentes’s frustration. For the first nine months of 2012, a combined total of 1,918 complaints were lodged against American and US Airways with the Transportation Department, which would have made an airline composed of the two the second-most-complained-about carrier behind United Airlines.
Complaints to the DOT represent only a fraction of overall grievances related to a carrier. The numbers are virtually the same as in 2011, when a merged airline would have had the distinction of being the most-complained-about air carrier in the United States.
Travelers like Candi Kruse, who works for an electronics manufacturer in Allentown, Pa., say they’re concerned that these two underperforming carriers will drag each other down further, not unlike what happened after Continental and United merged, leaving customers with a worse airline than before. Kruse thinks that US Airways’s service has steadily improved, but she is unimpressed with American, which, she complains, flies “ancient planes” and subjects her to “bad flight experiences.” If the two airlines become one, Kruse says, she will shift her Gold-level loyalty with US Airways to another airline.
By other measures, a combined airline wouldn’t be that awful. For the first nine months of 2012, US Airways placed fifth and American seventh in the lost-luggage rankings. Together, they misplaced 224,402 checked suitcases, according to the DOT. That’s just over two bags per 1,000 customers, putting them in the middle of the flock in terms of performance. They also rate so-so in the denied-boardings category, turning away only 0.73 passengers per 10,000 — a respectable number.
Other passengers see the benefits of a deal. Jason Carns, a physician based in Phoenix and an American Airlines frequent flier, says that a combined airline would offer him more flight options, and maybe the ability to earn miles through more international airlines. “Overall,” he says, “I am very much in favor of a merger.”