Is the American-US Airways merger delivering on its promises?

The new American Airlines — the product of last year’s controversial merger between American and US Airways — may only be a few months old, but that hasn’t stopped travelers from forming opinions about the world’s largest airline.

The carrier, based in Dallas, has made some noteworthy changes since it settled a lawsuit with the Justice Department in December, clearing the new American for takeoff. Among them: revising some of its frequent-flier benefits, small but important changes to the way it sells flights, and new ticket policies.

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“Significant benefits for customers are already being delivered,” says American spokesman John McDonald.

But passengers, virtually none of whom were asking for this merger, are skeptical. A survey conducted this month by a team of researchers from Georgetown University’s McDonough School of Business found that customers expect prices to rise and quality of service to fall after an airline merger like this one. “Much to our surprise, most types of mergers are viewed negatively by consumers,” says Kurt Carlson, director of the Georgetown Institute for Consumer Research.

It’s not difficult to find air travelers who are unhappy. Michael J. Fox, a retired high school teacher from Tucson, says that American is treating its customers worse now than before the merger. Fox recently received a notification that his American Express Platinum Card would no longer give him access to the Admiral’s Club lounge in Phoenix, nor any of the others in the American Airlines system. “This will affect many passengers in one big negative way,” he says.

Some customers were also disappointed when American eliminated bereavement fares, a move the airline claimed was necessary to bring it in line with US Airways’ policies. Bereavement fares are extended to passengers who have to attend a funeral and must fly at the last minute. Although American’s pre-merger bereavement fares weren’t known to be generous — offering only a 10 percent discount off the most expensive fare — they gave American brownie points in the customer-service category.

But not everyone is unhappy. Amanda Woodhead was pleasantly surprised when she checked in for a recent American flight and found that her US Airways benefits carried over, including a waiver of the fee for checked baggage. She has also seen more available flights when she visits the American Web site, which is the result of a so-called “code-sharing” arrangement. “It appears that the ticketing computer systems are aligning,” says Woodhead, a frequent flier who commutes from Washington to Nashville, where she works for a health-care company.

Experts say that it’s too soon to know whether this merger will be relatively smooth, like the one between Delta and Northwest, or problematic, like the last legacy airline merger, between Continental and United. Many challenges lie ahead as the two companies start to operate as one, including such internal challenges as workforce integration and moving to a common reservations system.

“Customer complaints will likely be the first indicator of how things are going,” says Robert Mittelstaedt, dean emeritus of the W.P. Carey School of Business at Arizona State University, who is himself a frequent flier on American.

By that measure, the new American may have a little work to do. For January, the most recent month for which figures are available, it has a total of 305 formal grievances lodged with the Transportation Department, making it the second-most complained-about airline in America behind only United, which had 311 complaints. (Complaints filed to the DOT represent a fraction of actual complaints but can be a useful barometer of how an airline is doing on customer service.)

For 2013, the combined American was the most complained-about airline, with a total of 2,536 grievances. United, in second place, had 1,935 complaints.

Two other numbers worth considering are luggage fees and ticket-change fees, a constant source of irritation to passengers. In both those categories, American holds a commanding lead.

For the first nine months of 2013, the combined American collected more than $783 million in baggage fees, $148 million more than the No. 2 airline, Delta. Ditto for reservation change fees, where it charged passengers $650 million during the same period, or $14 million more than runner-up Delta.

Kendall Creighton, a spokeswoman for, called the numbers “alarming.” Although it figures that the world’s largest airline would also collect the most fees and have the most complaints, she and other experts say that American can do better.

It’s hard to find anyone who’s entirely happy with the merged American — but not impossible. One person who’s over the moon about the deal is Dennis Myrick, and he hasn’t even flown on the carrier since it merged.

Two years ago, Myrick bought 32,000 shares of American Airlines stock at 60 cents per share. It was a risky investment, with American operating under bankruptcy protection. Initially, his shares faltered, but after the merger’s approval, Myrick hit pay dirt. “My initial $20,000 investment is now worth north of $400,000,” he says.

Something tells me that American won’t be able to make all its customers that happy. But with the busy summer travel season just ahead, let’s hope that it tries.

Has the American-US Airways merger been good for passengers?

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21 thoughts on “Is the American-US Airways merger delivering on its promises?

  1. I didn’t vote. It’s too early to know whether the merger HAS BEEN good for passengers. The airlines are still operating as separate entities. If Chris had asked about my outlook for the future of the merged airline, my answer would be that it will be a disaster for both the passengers and the employees.

  2. Taking 2013 statistics for the “new” American when it wasn’t even merged then is disingenuous. How can you talk of the merger benefits citing statistics for complaints and fees when they were not merged?

    A better use of 2013 numbers is using those combined statistics for the “before” to compare with final 2014 and 2015 statistics.

  3. The merger of US and AA is doing exactly what it was designed to do — make money for the stockholders. This is the only thing any merger in the modern world is supposed to do. So as long as they don’t chase away enough passengers so that their income starts to fall and the stock price goes down, the merger will be seen as a “success” regardless of what it means for the actual customers.

    1. I do wonder about people that insist everything be included and prices/services be the same as they have always been; do they also complain their investment portfolio is not performing well and they need to work 5 or longer years than they planned? I want it all now, at little or no cost to me, yet I want my stocks to appreciate and pay dividends so I can retire. Uh, how exactly does that math work?

  4. “Some customers were also disappointed when American eliminated bereavement fares, a move the airline claimed was necessary to bring it in line with US Airways’ policies.”

    Why necessary? Really poor excuse. Not that most rather expensive bereavement fares do much good anyway.

    Do love that new CEO Doug Parker brings a far more enlightened management style to American, which has a sad history of marked animosity between employees and management.

    1. The bereavement fares were discounted from the Y fares, which allowed you changes as you often never know what is expected of you in emergency situations.

      1. Yes, you may decide to stay longer to comfort a loved one.

        Nevertheless, I’d be very surprised if the overwhelming majority of bereavement travel was not just to attend scheduled funerals, with a need to go back to work or school as soon as possible.

        Christopher doesn’t much like companies like Hotwire, but they can save travelers considerable money in emergency situations–far more than airline bereavement fares.

        1. No, domestically, Hotwire doesn’t save anyone any more that dealing with a travel agent or going to the airline directly. By knowing the area you need to travel to and not having to travel today, you can often find decent fares, but they have restrictions that bereavement fares didn’t. I have sold many bereavement fares over the years.

          1. “By knowing the area you need to travel to and NOT HAVING TO TRAVEL TODAY.”

            We’re talking emergency travel. My comment in bold.

            I am a former brick and mortar travel agency manager. There’s a place for face-to-face and a place for online. In the case of most bereavement travel, I believe it’s online. I’ll book my grandparents’ 50th anniversary trip of a lifetime through you.

          2. Why the attack Don? If you were a TA manager, why the heck would you even mention Hotwire? Often people have a day, two or three to get to a funeral. I have sold 3 day advance tickets for less that bereavement fares. For my area, we are serviced by 5 airports. For one client, I saved her hundreds of dollars by flying her into SJC vs OAK or SFO. Same with flying to BOS. There are several other airports for that area and you can often get a better fare with one over the other.

          3. We must do what’s best for our customers.

            To say that one side is always good or always bad very likely may not be what’s best for them.

            At least compare prices in every situation. The lowest I realize may not be the best in all cases, but that’s a decision that should be based on facts.

            Because don’t want to get into a long argument over the virtues or lack of them of using online services such as Hotwire, this must be my last reply to you. Will close though by saying that you are obviously a person who cares about your customers.

          4. I’m also in this business and actually have to agree with you.
            I would refuse to sell (ticket) a tricked or hacked fare but I won’t think twice using an OTA vending machine to have it ticketed. Note: for those of you who don’t know what I’m talking about, please google it.
            That said, and OTA is really good for something 🙂 Hotwire opaque fares is good for something. You just have to know what it is good for.

          5. Tony, one of the sad things in the travel industry is that so many counselors upon the elimination of most airline commissions and the advent of online travel booking did not look at these as their liberation, instead of as their enemies. In no other true profession does everyone try to be everything to everybody. Counselors who have thrived since then have most often done so in niches they love to serve, where their expertise is truly valued.

    2. There’s an irony about bereavement fares. I had to take a short notice flight from Seattle to Philadelphia when I got word my father had hours to live. The cheapest one way coach fare (I was in Seattle on business and would return home to California afterwards) for a same day flight was about $1700 direct, and about $1200 with layovers. I decided, just for a laugh, to try for a first class fare.

      $760. Direct.

      So, though it wasn’t a happy reason to travel, at least I wasn’t in steerage.

      I think perhaps what happened was steerage was fully booked, but first class had to keep a seat open for a potential air marshall, and one wasn’t assigned, so the seat was available.

  5. HAHA – how slanted is the point of view when a sentence is ‘But not everyone is unhappy’. He can’t even bring himself to say that some people are happy; it must be cloaked in a double negative.

    1. Oh, and the “It’s hard to find anyone who’s entirely happy…” and “Something tells me that American won’t be able to make all its customers that happy”. Seriously – that is really going on a limb saying that ALL people won’t be ENTIRELY happy. *eye roll*

        1. I have no opinion one way or the other yet. It may go okay, it may not. I don’t know how I ‘feel’ yet. But it is it that painful for someone against the merger to say something positive and not use the double negative?

  6. Watch for massive growth in airlines like & as people get fed up with big ugly airports & totally stupid TSA & nonscience that people are somehow safer due to TSA.

    + we hear of a new business model about to emerge, one that uses larger aircraft than surfair (similar to ultimates aircraft size) but have more than 1 airfare.

    It seems that many corporates simply say to the assistant, book a flight & price doesn’t really come into it, but on other hand, there are small business owners who watch every cent, so a more traditional airfare model, not with 20 different fares, but something like 4.

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