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How the American Airlines Merger Affects Frequent Flyers

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The American Airlines and US Airways merger is a game changer for the airline industry. Reducing the number of airlines means less competition and eventually increased airfare. Not only will this merger affect the consumer’s wallet but also their frequent flyer miles. So what happens to the loyal frequent flyers of each program? Below are the pros and cons for each frequent flyer:

American Airlines AAdvantage Program

Pros Cons
  • Access to Europe/Middle East: The merger will allow AAdvantage members to fly to the following US Airways destinations: Amsterdam, Athens, Brussels, Glasgow, Lisbon, Munich, Shannon, Venice and Tel Aviv.
  • Devaluation of miles: American Airlines will probably transition from a three-tier program to a four-tier program to manage the large number of frequent flyers and allotted benefits. This means frequent flyers will have to fly more miles and more segments to obtain benefits such as free checked baggage, priority boarding, same day standby, and seat upgrades.
  • More domestic flights: Access to 53 additional US cities.
  • Less upgrades: The AAdvantage program currently has 71 million members and US Airways Dividend Miles program has 30 million members. The merger results in a new American Airlines AAdvantage program that will have approximately 101 million members. This means more elite flyers will be fighting for the same upgrades.
  • Cheap business class awards to Hong Kong and Australia: US Airways is famous for offering great deals for business class tickets to Hong Kong and Australia. It’s uncertain whether the merger will allow this deal to remain, but the merger won’t be finalized for another few months so AA members should capitalize while they can.

US Airways Dividend Miles Program

Pros Cons
  • Access to Asia, Central America, South America and the Caribbean: Dividend Miles members will have access to several international locations serviced by American Airlines. This means booking travel to these locations will become easier than having to call the airline to book through a partner airline.
  • New alliance, less countries, even fewer partners: US Airways will leave Star Alliance, which is the largest airline alliance in the world, to join Oneworld. Oneworld has fewer partners than Star Alliance (11 instead of 27) and flies to only 150 countries compared to Star Alliance’s 194 countries. Additionally, Star Alliance offers great deals with for their business class award tickets, which will be lost when US Airways moves to the Oneworld Alliance.
  • Premium products: The recent rebranding of American Airlines means that there are more perks and a better overall product. American Airlines has introduced their new transcontinental and international widebody aircrafts as well as advanced in-flight entertainment systems. Additionally, if American’s meal habits are adopted, Dividend Miles members will start enjoying meals on their three-hour flights (currently US Airways does not serve meals on three-hour flights).
  • Increased baggage fees: If American Airlines baggage fees are adopted (which is likely), US Airways passengers will start paying $25 more for three or more bags (current fee is $125). Additionally, overweight bags will be charged $10-$25 more depending on the baggage weight.
  • One-way reward tickets: US Airways doesn’t allow Dividend Miles members to book one-way reward tickets. American allows members to book one-way reward tickets and will most likely continue to allow one-way reward ticket booking. This means more flexibility when booking rewards.
  • More competition, less upgrades: Moving from the smallest frequent flyer program, with 30 million members, to becoming the largest frequent flyer program, with over 101 million members, means more competition for those upgraded seats. US Airways does a great job of upgrading elite members, but this perk will become much less frequent with more elite members diluting the upgrade inventory.

The good news

Since the merger was recently announced and consumers are nervous about the impending changes, there will be a period where the airlines won’t want to upset loyal frequent flyers by revoking benefits or increasing miles required for award tickets. Additionally, the merger will result in 281 international routes and 682 domestic routes, which will make it easier for travelers to maintain (and build up) their elite status.