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Airline Mergers, American Airlines, US Airways

Day One of the new American Airlines

Congratulations to the people of US Airways, American Airlines, and all who worked to build this new company, which came into existence a few hours ago: American Airlines Group.

Whether you supported this merger, were neutral, were ambivalent, or hated the idea, it’s now a done deal. One company. Let’s hope it succeeds, because there are real men and women working at it, and at its vendors, suppliers, agents, affiliates, whose income and households depend on their employment. There are shareholders of the new American Airlines stock, including retirement funds, and of both airlines’ debt instruments, again including retirement funds. So whether it’s bigger than you wanted, whether you love’em or hate’em, there are real people’s lives at play here. Both AA and US (the airlines of the new company) have made a lot of improvements recently, so I’m hopeful for them. I also have some friends who work for them, and that’s my “skin in the game” right there – I want my friends to continue to have jobs!

Now some important questions, and what’s known of the answers, and advice. I’m going to skip most of the common stuff, because you’re better off clicking the picture above, which will take you to the American Airlines website aa.com’s special merger info page, www.aa.com/arriving. Or to the USAirways.com version of the merger info page.

That’s your first lesson, right there. US Airways and American Airlines are still two entirely separate airlines. They have two entirely separate websites. Right now, they have absolutely nothing in common, except that as of early this morning, Dec. 9, 2013, they are now both owned by the same company. You buy US Airways tickets at usairways.com. You buy American Airlines tickets at aa.com. You check in, whether online or at the airport, at the appropriate American or US Airways location. Nobody from American Airlines (the airline itself) can yet help you with anything to do with a US Airways flight, ticket, reservation, frequent flyer account, payment issue, nor anything else. Nobody from US Airways can yet help you with anything to do with American. It will be that way for months. On some issues, possibly for a few years.

In other words, as a traveler about to head out on a business trip, or for holiday season vacations and family visits, absolutely nothing has changed. American and US Airways weren’t even in the same alliance, didn’t even have any codeshares. They had near-zero cooperation, unlike some airlines. Right now, today, United Airlines still has more in common with US Airways than American has with US. Because US Airways has a decades-old codeshare agreement with United, US Airways is still a member of the Star Alliance airline partnership founded by United, and in fact it was United that sponsored US Airways into Star Alliance a decade ago. You can fly US Airways today and get United Mileage Plus miles. You can fly United today and get US Airways Dividend Miles. You can redeem United miles for a “free” (award with fees) ticket on US Airways, today. You can redeem US Dividend Miles for a “free” ticket on United, or any of the other roughly 25 Star Alliance member airlines, today.  Just like you could yesterday.

Those frequent flyer partnership, codeshare arrangements, and alliance membership agreements (which are separate items, not synonyms) are going to change, but they haven’t changed yet. So figure that into your planning. If, like many business travellers and like most savvy personal travellers (which does add up to still a minority of all airline travellers), you actively manage your frequent flyer accounts and use alliance partnerships for optimal perks, awards, earnings, redemptions, there are some facts and dates you need to know:

  1. March 30, 2014.
    US Airways (the airline; the company itself no longer exists) leaves Star Alliance. This is the last day on which you request, and ticket to completion, a frequent flyer award on any Star Alliance airline. It is the last day for earning US Airways Dividend Miles by flying on a Star Alliance Airline. (There are exceptions; they’re important; I’ll get to them.)
  2. March 31, 2014.
    US Airways (again, the airline, which will still be separate from American-Airlines-the-airline) joins the oneworld alliance, which was founded by American Airlines (among others). This is the first day you can use US Airways dividend miles to ticket “free” award flights on oneworld carriers. This is the first day you can earn US Airways Dividend Miles from paid flights on oneworld carriers.
  3. Sometime in January 2014 (exact date not yet announced edit: Jan 7 per this Frequent Business Traveler interview):
    This is when US Airways and American Airlines will start having some reciprocal frequent flyer benefits. They’ve announced that you’ll be able to earn American AAdvantage Miles on US Airways flights and US Airways Dividend Miles on American Airlines flights, hopefully by end of January, maybe even earlier. Even though they will still be in competing alliances at that point, for 2 more months, they will have some “within the holding company” reciprocity. I wouldn’t expect everything. (edit: I have doubts, as a former software engineering professional, about them hitting that January 7 deadline. But sometime in January, sure, expect this.)

So, if you’re a savvy frequent flyer program user, you know that you need to plan your 2014 travels for which airline(s) and alliance(s) in which you want to earn status. What “airline status” is, is a topic for another time, but in short: upgrades, early boarding, free luggage/additional luggage allowance, preferred seating, priority security lines, lounge access, varying with program and level in program.

If you’re working a Star Alliance program, then don’t book US Airways flights for travel that departs on its last leg of the ticket after midnight March 30, because you won’t get miles credit, elite qualifying miles credit, segment credit. Nothing. You won’t be able to use any Star Alliance status you may have from your current airline after that date, so no extra bags, no lounge access, no early boarding. Conversely, if you’re working a oneworld program as your primary FF plan, and are looking to earn status in 2014 and use 2013-earned status in 2014, you can include US Airways flights in your planning as long as they depart on the first leg on your ticket as of the morning of 2013-03-31.

Example please?
OK, me! I am using a program from a Star Alliance program as my now-primary FF program, the program I used in 2012 and 2013 to earn miles in and redeem miles from, and the program that I hope to earn enough EQM (elite qualifying miles) from paid 2014 flights to get status in 2014 for the remainder of 2014 and all 2015. That means, “No US Airways flights after March 30, 2013, Mark.”

Except it doesn’t! At least not in my case, at least not entirely. Maybe not in yours either. That’s something I haven’t seen much coverage on yet. That’s my “I’ll get to them”. It turns out that US Airways (again, the airline, which is not the same as the now-ended company) is planning on keeping a lot of frequent flyer partnerships with existing Star Alliance partners. Far more than I’ve seen airlines keep with “the ex” in other mergers. Somewhat buried on the US Airways site’s version of the merger info page, is this tidbit:

We plan to continue relationships with the following airlines, which means you’ll be able to earn miles on these select partners even after we’ve exited Star Alliance: Aegean, Air China, Air New Zealand, Avianca, Ethiopian Airlines, Eva, Shenzhen Airlines, Singapore Airlines, South African Airways, TAM, TAP and Turkish Airways.

To which I reply: Wow!

Avianca, formerly the two airlines Avianca and Taca, part of the now-completed-merger AviancaTaca Group, is my primary Star Alliance frequent flyer program. I’ve been crediting all my Star paid flights to them, including a few US Airways flights this year and last year. Recently used Avianca LifeMiles to get a “free ticket” ($2.50 US fees/tax) for a cross-country United flight from New York City to San Francisco.

Living in Uruguay, a lovely country without an airline of its own, for my trips within South American and back to the USA, I have often been flying Taca (now Avianca), and TAM (now itself merged with LAN of oneworld and about to join oneworld). So it seems to me that I can keep Avianca LifeMiles as my primary Star Alliance program, thus earning on flights back to the States, whether on United (from Argentina, Brazil, or Peru), or on TAM (via Brasil), or on Copa, but also continue to use US Airways flights when I’m back in the USA. All going into my same preferred “bucket”, my Avianca(Taca) account.

No, it doesn’t explicitly say I can continue to earn Avianca miles when flying US. It says you will be able to continue to earn US Airways miles when flying Avianca. But these arrangements are normally reciprocal, especially these outside-of-alliance arrangements. Happy, tentatively.

Sure, I could instead switch to American AAdvantage, and use American from South America (the only North American airline that goes to Uruguay nonstop, or via Argentina, Brasil, Peru), but I may not be flying enough to make it worth using two different airline programs.

If you’re in Africa, or China, Oceania, or South and Central America, this is unexpected good news. US Airways is keeping a lot of relationships with airlines that are in our regions of the world, even though they will now be with “the other guys”. Which implies, admittedly does not promise, they will remain when the two actual airlines, US Airways and American Airlines, merge operationally and legally into being a single airline, which will be called American Airlines.

And that’s your last lesson: It’ll be probably at least a year, and if prior mergers are predictions, more like 18-24 months, before there is just one airline, American Airlines. Some customer-facing things will happen in the meantime, like perhaps being able to transfer or combine miles (I’d expect that mid-2014 but not as soon as that Jan 2014 reciprocal earnings), get some help/info from one airline about the other, minor things like that, as 2014 progresses. But the real “it’s just one airline” point is still over a year away by any reasonable estimation.

I hope this article helps you with your holiday travel and your 2014 travel and frequent flyer program planning. I’d love to hear your experiences, thoughts, and opinions, in the comment section!

About Mark Mercer

Expat aging sometime-ski-bum former corporate tool. Currently living in the beachside aging resort town of Atlántida in Uruguay. Sometimes skiing and teaching in Breckenridge, Colorado, USA. Location and velocity cannot be simultaneously observed.

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