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How Frequent Fliers Might Be Affected By Airline Merger

frequent flyerSpeculation seems to be running rampant about potential losses to frequent flier accounts via the merger of American Airlines with US Airways. A new study recently analyzed American Airlines AAdvantage program and US Airways Dividend Miles program and found several pros and cons, many depending on which airline's existing program is adopted for both.

Comparing programs, TravelNerd looked at some possible scenarios and came up with some interesting "what if?" results. Not all are bad either. US Airways members would come out ahead, for example, if the combined airline sticks with American's meal program, enjoying meals on three-hour flights.

That's good news. Not-so-good news: increased baggage fees could be a result as well. If the American Airlines program is adopted for both airlines, US Airways passengers will have to pay $25 more for three or more bags, and $10-$25 more for overweight bags

Thinking the new alliance means less countries, TravelNerd says US Airways will say goodbye to Star Alliance and join Oneworld, so Dividend Miles members will lose access to 44 countries.
On the other hand, I am a member of both loyalty programs and received emails from each saying not to worry and that everything will stay the same. TravelNerd cries foul.

"Airlines are aware that mergers make consumers nervous and will send newsletters to members to ensure that their miles and status are safe," Amy Lee TraveNerd Senior analyst told me via email. "This is true there are usually no changes in the short term."

But Lee believes that change is coming and once the merger is complete and has passed government regulations, the streamlining will begin.

"One way they plan to do this is to bring Dividend Miles members into their AAdvantage program," notes Lee. "In the American Airlines Merger Investor Presentation, they wrote, "US Airways members join AAdvantage, the first and best developed loyalty program in the world." This implies that they plan to maintain one loyalty program - presumably AAdvantage since American Airlines brand will be taking the helm of this merger."

Travelnerd points to the United-Continental merger as an example, noting that merger was announced in May 2010 but frequent flier accounts were not linked until March 2012.

More bad news from the study is the notion that more members equals less upgrades. TravelNerd predicts that with a combined total of over 101 million members, frequent fliers will have a tough time upgrading their seats.

Our first thought: Why? Are they going to sell off a bunch of planes? We've heard nothing of decreased capacity.

"Regarding upgraded seats, you're right there are going to be the same number of seats available," replies Lee. "However, Dividend Miles members currently enjoy many upgrades due to their smaller frequent flier program (30 million members). Once the merger finalizes, the AAdvantage members (71 million members) will make it harder for the Dividend Miles members to enjoy as many upgrades as they currently do because of the increased number of frequent fliers."

Admittedly, much of what we have here is speculation. But if Merger History 101 tells us anything it's that change is inevitable. It will be interesting to see how it plays out.

For a closer look at the merger from an unbiased source, we turn to public broadcasting and their sobering view on the topic:



[Photo Credit- Flickr user the queen of subtle]

Filed under: North America, United States, Airlines, Airports, Airline Reviews

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