US Airways & American Airlines’ planned merger: What does this mean at London Heathrow?

American Airlines & US Airways are, after much speculation and uncertainty over regulatory approval (and significant concessions over slots at US airports), expected to merge.

As the two airlines have large domestic networks in the US much of the coverage has naturally focused on the impact in the US. However, the merger does have implications for travellers in London, particularly frequent flyers of British Airways and Oneworld which is what I focus on in this post.

American Airlines is a member of the Oneworld alliance with British Airways and the two airlines operate a joint-business across the atlantic serving, inter alia, key American Airlines hubs in New York, Miami, Dallas-Fort Worth, Chicago and Los Angeles from London Heathrow.

US Airways is (for now) a member of Star Alliance and has a relatively small presence in London serving Charlotte and Philadelphia from London Heathrow. The airline’s main hubs in the US are in Charlotte, Philadelphia, Pheonix and Washington.

1. What we know will happen

  • American Airlines and US Airways will merge in 2014.
  • The combined airline will operate under the American Airlines brand and be a member of the Oneworld alliance. US Airways will leave the Star Alliance and join Oneworld on 31 March 2014.
  • This means that members of BA and American Airlines’ frequent flyer programmes will be able to earn and redeem miles on routes currently operated by US Airways.
  • The combined airline will add approximately 50 destinations in North America not currently served by either BA nor American Airlines, specifically a large number of routes from US Airways hubs in Charlotte, Philadelphia and Pheonix.

2. What is likely to happen

  • US Airways will probably move from Terminal 1 at Heathrow and co-locate with American Airlines in Terminal 3.
  • BA will codeshare with US Airways on its transatlantic routes and domestic flights in North America, adding approximately 50 destinations that can be reached indirectly in North America from BA’s network at London Heathrow.

3. What may also happen

  • US Airways may add additional services and frequencies at London Heathrow, specifically a flight to Pheonix.
  • BA may also launch a direct route from London Heathrow to Charlotte.
  • BA may increase frequencies to Philadelphia (usually twice daily) and Pheonix (usually daily), supported by feeder traffic at these US Airways hubs.
  • The merger may also help launch new services to other secondary US cities not currently served by BA nor American from Heathrow. BA has already added new services to San Diego and Austin (launching next year) and one reason for this was the presence of American Airlines’ frequent flyers in the local market.

All in all it does strengthen the presence of Oneworld in the London Heathrow transatlantic market, just as Virgin Atlantic and Delta are about to start their joint-venture and give American Airlines and British Airways are run for their money on the London – New York route.

A word of warning that mergers of airlines, particularly legacy US carriers, are not pretty. United Airlines was beset by operational difficulties whilst digesting its merger with Continental Airlines, so there may be a lot of painful operational issues in the first year of the merger. To add to this, both American Airlines and US Airways also have a history of poor industrial relations and there are already signs of discord between rival unions.

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