US Airways, America West to Merge
||:: Late-Breaking News
(Posted: May 19, 2005)
America West and bankrupt US Airways inked a merger deal Thursday, claiming that the agreement would help both carriers better compete in an age of high oil prices and heavy competition.
The new airline will operate as US Airways but will be run by America West Chief Executive Officer Doug Parker.
Arlington, Va.-based US Airways is heavily focused on the East Coast markets, with significant numbers of flights out of Philadelphia, Pittsburgh and Charlotte, N.C. America West, which is headquartered in Tempe, Ariz., counts Las Vegas and Phoenix as some of its busiest cities.
We suspect that the two programs, Dividend Miles and FlightFund, will announce a reciprocal agreement between the two programs shortly. This will be similar to the current reciprocal relationship that members of United Mileage Plus and US Airways Dividend Miles currently enjoy, but better. As you may know, the relationship between United and US Airways is alliance-orientated, not partner-orientated. This means that members of US Airways Preferred elite status do not enjoy similar elite benefits when flying United.
However, we believe that if and when America West and US Airways announce any relationship, it will likely mirror that which members of FlightFund enjoyed through the brief relationship they had with Continental OnePass, and that would include reciprocal elite benefits such as space-available upgrades, etc.
We also think that such an announcement won?t mean a seamless relationship overnight, and any integration of the two airlines will likely take nearly two years to complete, though we suspect that the integration of the two frequent flyer programs will be accelerated, and we?ll see a single frequent flyer program within one year?s time.
The problem is that with the loss of many marketing executives at US Airways, and lean staffs overall at both airlines, there?s not many chiefs left to make this happen. Right now our money is on the marketing staff at America West FlightFund to lead the integration, and frankly, with what we?ve seen coming from this program in recent times, it?s all good for members on both sides.
We foresee several other things happening that can and will benefit the members of both programs. Mileage balances in both programs will likely merge together over time with no loss, and that means members really don?t have to worry about what will happen to their miles. We highly recommend that members of both sides get in as many partner and promotional bonuses as they can over the next 6 months to enjoy enhanced account balances, because over time there will be a single set of partners and some may be gone.
We also suspect that the synergies of the two airlines will mean a re-launch of service to Hawaii for the benefit of leisure traffic westward, as well as enhancing the overall appeal of a low-cost, but major player in frequent flyer programs. Many years ago, America West had service to Hawaii on their own, and the management of America West at that time admitted the sole reason was for the benefit of their frequent flyer program. It?s a no-brainer for them, given the popularity and expanse of America West Vacations.
All in all, this is one of the best news stories to emerge from frequent flyer programs in the past two years ? ever since US Airways announced a partnership with United Mileage Plus. And yes, we fully expect this new entity to remain a proud Star Alliance partner.
posted: May 20, 2005 at 3:25pm (MT)
I was curious if your best guess is that the United/US Air "alliance" will remain. I am 1k on United and would love access to the America West network.
posted: May 20, 2005 at 7:51pm (MT)
It will likely not remain as "United /US Airways," but but it will remain on some level, because of US Airways' membership in Star Alliance, of which United is a member. Because AWA is such a competitor of Ted out west, United will likely default to the requirements of Star Alliance and nothing more. But, that would still be good enough for you to earn United miles while flying the newly enhanced US Airways/America West route system.
posted: May 20, 2005 at 8:25pm (MT)
Curious to see what will happen to the Hawaiian Airlines codeshare agreement that America West currently has. Would the new US Airways flying directly to Hawaii (without a plane change to Hawaiian Airlines in Phoenix or elsewhere) alter this agreement? Have points on both Hawaiian Airlines and US Airways so ideally would like them to keep, or even expand, this relationship.
posted: May 24, 2005 at 3:02pm (MT)
Also I wonder what will happen to the
partnership with Northwest espicially the
posted: Jun 23, 2005 at 7:06pm (MT)
I applaud the "merger" of US Airways and America West (yet to be approved and finalized). Although I personally would not fly to east coast destinations, I think the expansion of routes should be beneficial to America West -- provided that they only fly profitable routes. If they are smart about it, they will start chopping out the unprofitable routes. If not, they may have swallowed more than they can digest.
If America West remains a "low-fare" carrier, then it will be interesting for people to fly at low fares and gain benefits on higher fare carriers in an alliance, such as United. Something tells me that may be changed.
And of course, being a Hawaii resident, I certainly applaud America West coming to Hawaii, altho Hawaiian Airlines and Aloha are two very fine airlines that I really enjoy. The competition of airlines can only benefit the passenger.
posted: Jul 22, 2005 at 8:55pm (MT)
Changes are already happening at America West's FlightFund. First Class award travel has been increased from 40,000 miles to 55,000 miles(R/T) and to 90K on their unrestricted first class seats on their long-haul flights. It appears to me that AmericaWest is preparing for an onslaught of USAir mileage redemption and making it more costly for anyone wanting to go to/from the east.
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