Must-know: Major integration and network developments post-merger with U.S. Airways

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American Airlines Group - Second quarter earnings overview (Part 2 of 11)

(Continued from Part 1)

Integration with U.S. Airways

American has made the following progress with respect to integration of its operations with U.S Airways. The merger has allowed the company to replace smaller regional aircrafts with larger mainline aircrafts and better match aircraft size with customer demand in various markets through flight alignment and redeployment.

 

  • After the merger, U.S. Airways joined American in the trans-Atlantic business agreements and codeshare agreements with British Airways, Iberia, Finnair and Airberlin. The two companies have successfully combined operations in 72 airports after the merger.

  • Announced new mileage redemption options under the two frequent flyer programs, American Airlines’ AAdvantage and U.S. Airways’ Dividend miles members. The company plans to combine the two programs by 2015. If passengers have accounts in both programs, the accumulated points will be combined. Until the programs are integrated, AAdvantage elite status members may upgrade to First Class on U.S. Airways within 24 hours of departure. Other benefits offered to AAdvantege elite status members for travel on US Airways are listed in the chart below.
  • Reached three labor agreements with the International Association of Machinists union covering more than 11,000 U.S. Airways employees.

 

 Network developments

During the second quarter, the company added 21 new aircrafts as part of its fleet modernization plan. It announced twelve new routes in the United States and Canada from Dallas/Fort Worth (DFW), Chicago O’Hare, Los Angeles, Charlotte, Philadelphia, Phoenix. Expanded European presence with new seasonal services between its hub at Charlotte Douglas International Airport and Barcelona, Brussels, Lisbon and Manchester and added new non-stop services between DFW and Hong Kong and Shanghai to strengthen its presence in the Asia-Pacific region.

After the merger with U.S. Airways, American Airlines (AAL) is the largest airline in U.S. measured by available seat miles (or ASMs) with a 26% market share followed by United Continental Holdings (UAL) with a 25% share and Delta Airlines (DAL) with a 23% share. Together with its low cost competitors, Southwest (LUV) and Jet Blue (JBLU), the top five airlines comprise 91% of the total domestic market share in U.S.

Continue to Part 3

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