AmericanUS Airways merger to raise fares

first_imgWhat effect will the probable merger of American Airlines and US Airways have on consumers? For one thing, thanks to reduced competition and capacity, higher airfares, many aviation experts have predicted.But, according to Farecompare.com founder and chief executive, Rick Seaney, with the assimilation of operations likely to take between 18 months and two years, travellers won’t need to worry about the effects of a merger just yet, MarketWatch reported.“In the long run, ticket prices will go up, but in the short run, they will stay competitive,” he explained.And importantly, loyalty miles will likely remain untouchable, and may even become more valuable, said Seaney, who explained that it would simply not be in the best interest of any airline to alienate their most loyal travellers.       Although US carriers successfully raised airfares five times last year, ticket prices for domestic travel in the US are at an all-time low. So even if the union between the two airlines were to earn the carriers US$1.2 billion in additional revenue and savings on merged hubs, as US Airways has claimed, it is highly likely those saving won’t be passed onto air travellers, according to the Wall Street Journal.      A decision on the merger could be reached as soon as early next week, ABC News reported. However, no actual deal is yet in place, a source said. A merger of American Airlines and US Airways would see the combined carrier become the world’s largest airline. Likely to be based in Fort Worth, the current headquarters for AA, the combined carrier is expected to retain the American Airlines name. A merger would see the combined carrier surpass United as the nation’s largest airline. Image: Andrew Harrer/Bloomberg Source = e-Travel Blackboard: M.Hlast_img

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