This Tuesday, Aug. 13, 2013 file photo shows an American Airlines plane and a US Airways plane parked at Washington's Ronald Reagan National Airport. On Tuesday, Nov. 12, 2013, the Justice Department said it had reached an agreement to allow the merger of the two airlines. The agreement requires them to scale back the size of the merger at key airports in Washington and other big cities.
The Justice Department said Tuesday it has reached an agreement to allow the merger of US Airways and American Airlines.
The agreement requires the airlines to scale back the size of the merger at key airports in Washington and other big cities.
In August, the government sued to block the merger, saying it would restrict competition and drive up prices for consumers on hundreds of routes around the country.
The airlines had said their deal would increase competition by creating another big competitor to United Airlines and Delta Air Lines, which grew through recent mergers.
The announcement means that the two airlines have cleared the last major hurdle to merging, but it will be several months — if not years — before passengers see any significant impact.
Passengers with existing tickets on American or US Airways — and members of both frequent flier programs — shouldn't fret. No changes will come immediately.
Since announcing the deal in February, the two airlines have been working behind the scenes to try and make the merger as seamless as possible. Following Tuesday's agreement, the two airlines said they expect the deal to close in December. But that doesn't mean everything will happen overnight. When the deal does close, here's what passengers can expect:
During the past five years, the airline industry has seen the combinations of Delta with Northwest, United with Continental and Southwest Airlines Co. with AirTran. The price of a domestic round-trip flight has climbed more than 15 percent since 2009, when adjusted for inflation, according to the Bureau of Transportation Statistics.
The merger will give a combined American and US Airways Group Inc. the ability to increase fares. United, Delta and Southwest would be likely to follow. Although it could also pave the way for further expansion by discount airlines such as Spirit Airlines Inc. and Allegiant Travel Co.
FREQUENT FLIER MILES
Your miles will be safe. After the merger closes, the two airlines will likely combine the miles into one program and elite status from one airline will likely be honored on the other. That puts the occasional traveler closer to rewards.
The merged carrier will continue American's participation in the OneWorld alliance, which was founded by American, British Airways, Cathay Pacific and Qantas. Today, it has 13 airlines including Finnair, Royal Jordanian and Japan Airlines. US Airways will leave the Star Alliance, which includes rival United Airlines, Lufthansa, Air Canada and 24 other airlines. Alliances allow passengers to earn and redeem miles on partner airlines.
A key reason for merging is to link both airlines' networks, creating a system on par with Delta Air Lines and United, part of United Continental Holdings Inc.
There is little overlap between the two airlines' existing routes. The combined carrier will offer more than 6,700 daily flights to 336 destinations in 56 countries, making it more attractive to companies seeking to fly employees around the globe with few connections.
US Airways passengers will gain access to American's international destinations, particularly London and Latin America. American's passengers will be able to better connect to smaller U.S. cities that US Airways serves.
The combined carrier will have considerable presence in New York, Philadelphia, Washington, Charlotte, N.C., Miami, Chicago, Dallas, Phoenix and Los Angeles. It is unclear how many of those cities will keep their levels of service. In past mergers, airlineshave promised not to close any hubs but have gone ahead and dramatically reduced service in once-key cities.
The merger of two airlines often means confusion and hassle for customers. Which terminal or ticket counter do they go to for check in? If there is a problem with a ticket, which company should they call? For a while, United and Continental were issuing two confirmation numbers for each ticket so either airline's staff could make changes. Problems with the integration of their frequent flier programs angered many loyal road warriors and computer glitches caused repeated flight delays. It could be months, if not years, until all American and US Airways planes get a uniform paint job.