American, US Airways Merger Could Spell Frequent Flyer Trouble

Speculation about whether American Airlines will merge with another airline has been rampant since the carrier entered bankruptcy late last year. Today, it seems closer to reality, with US Airways reaching an agreement with American's union workers to move ahead.

American Airlines
American Airlines

So what would it mean for the traveling public?

According to Doug Parker, CEO and chairman of US Airways, it's a great idea. "Combining American Airlines and US Airways would create a preeminent airline with the enhanced scale and breadth required to compete more effectively and profitably," he wrote in a filing with the Securities and Exchange Commission. "Our intention would be to put our two complementary networks together, maintaining both airlines' existing hubs and aircraft, and create an airline that could compete successfully with United , Delta and other carriers within our industry."

For frequent flyers, however, a marriage between the two airlines would bring significant changes.

US Airways is a member of the Star Alliance, along with United, so if US Airways were to merge with American, alliance membership would shift — and frequent flyers accustomed to earning and redeeming United miles on US Airways would no longer have the same ability.

A further consolidated U.S. airline industry could also lead to fewer available seats for award travel. While Parker mentions that the combined carrier would maintain existing hubs and aircraft, changes to aircraft configurations and routes flown post-merger could impact the availability of free seats.

American recently announced it's adding a Main Cabin Extra section in economy class throughout its fleet offering additional legroom. But it comes at the expense of removing at least one row of seats. US Airways currently has no such offering.

There's also a risk that airfares could rise with reduced competition in the industry. With one fewer unique airline in the playing field, airlines might be able to push through fare increases more easily.

Mergers are a complex process with government approval required, so while there is a threat to frequent flyers if American and US Airways were to merge, it may be a long way off.