American Merger Decision Promised “Within Weeks”

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Just saw this on the front page of Flyertalk. Sorry if it has been posted elsewhere on AFF...


American Merger Decision Promised “Within Weeks” | FrequentFlier.com

According to a memo from American chief Tom Horton to employees, published in theDallas Star-Telegram, the airline’s decision on whether to support or oppose a merger with US Airways will be made “within a matter of weeks.”That’s support or opposition at the level of American’s top management.
The unions representing the airline’s flight attendants and pilots have already come out in favor of a tie-up with US Airways, which would create the world’s largest airline traffic-wise.
Although Horton’s memo makes reference to the airline’s customers, his focus is clearly elsewhere: “Our objective is unchanged — to create the most value for our owners and the strongest possible American going forward.”
After waiting for more than a year for clarity, American’s customers won’t have to wait much longer to see how their interests fare amid the competing priorities of American’s owners, managers and workers.
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Whether we should move from 150k points per account to double this number in the first part of this year is a tricky issue but could be solved if US Airways stop their bonus offers. Buying points from them without a bonus would be a tough call.
Whether in a merger these miles become AA milles has not really been discussed in public but I think AA and OneWorld are very solid.
Coming back out of bankruptcy there are so many competing forces and the owners are likely to include a pile of creditors who will get shares instead of cash plus workers and managers.
I suggest you watch Bloomberg with AAMRQ shares still trading despite the company being in bankruptcy as this may be the earliest sign of an exit from being under water.
 
From the FT thread also comes this link-
FIREDOUGPARKER.ORG

Very interesting.I liked this bit of information on what the CEO of US gets if he can bring on this merger-
A few weeks ago I wrote a piece about what Doug Parker stood to gain if US Airways is allowed to buy American Airlines. At the time, I only had access to Doug's public salary info. But with special thanks to a little birdie at headquarters, I've learned a few more juicy details of just why Doug is pushing so hard for this merger. Even if Doug walks out on his job within two years after a merger, he will receive "change in control" payments worth about $18 million.

And it's not just Doug - the cronies all stand to gain from this. The top five executives would rake in about $40 million in gains.
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I assume that if they merge, the DM program will eventually be cancelled as US will merge into AA (and OW) and the merged airlines will use Aadvantage (and OW) rather than DM (and *A).

I know none of this ever happens quickly but what are peoples guesses as to the timeline if a successful merger was announced today? 12 months before the merger comes into effect? (and the DM program being cancelled), so 12 months in which to buy and then redeem miles? I assume they will honour existing DM bookings made through *A before the DM program is cancelled?
 
smit0847 said:
I assume that if they merge, the DM program will eventually be cancelled as US will merge into AA (and OW) and the merged airlines will use Aadvantage (and OW) rather than DM (and *A).

I know none of this ever happens quickly but what are peoples guesses as to the timeline if a successful merger was announced today? 12 months before the merger comes into effect? (and the DM program being cancelled), so 12 months in which to buy and then redeem miles? I assume they will honour existing DM bookings made through *A before the DM program is cancelled?
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This is exactly what I would like to know.

Have 162,500 US Dividend Miles now (all purchased during promos). Should l look at booking in a SYD-Europe return on TG/LH (like I did last year), or wait for the merger?

Currently, how much does a Sydney-Europe, F, return, cost on AA?
 
Not that I am a betting man but here goes

1) 12 months - could even be longer, there is a fair bit of formal process to go through, i.e. people who have to agree both internall (staff/shareholders/lenders etc.) and externally (govt agencies)
2) OW it will be
3) points will convert close enough to 1:1
4) DM bookings will be honoured

Personally I think there will be a period where you know the new rules and how points will be converted plus you can still use old (i.e. you will have a couple months notice) and can make a decsion on how best to use your miles.
 
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And you will probably hear it before us flash.The press conference will be in the wee small hours of tomorrow morning back here.
 
Information about the merger available here: US Airways | Welcome

Planned to complete on the loyalty program side around Q3 2013.

Doug Parker said:
The New American is Arriving As a valued member of the US Airways Dividend Miles[SUP]®[/SUP] program, we wanted to inform you of some exciting news. Today we announced that American Airlines and US Airways will combine to create a premier global carrier. Operating under the iconic American Airlines name, one of the most recognized brands in the world, the combined airline will have a robust global network, a strong financial foundation and one of the most modern and efficient fleets in the industry. We are excited about what the combination of our two great airlines means for our valued customers.

More Access to More Destinations
The combined company will provide customers with access to more choices and increased service across a larger worldwide network and through an enhanced oneworld[SUP]®[/SUP] Alliance, creating more options for travel and benefits both domestically and internationally. The new American Airlines will offer more than 6,700 daily flights to 336 destinations in 56 countries.

The combined company is expected to maintain all hubs currently served by American Airlines and US Airways, with increased service to existing markets and service to new cities. It is also expected to provide the most service across the East Coast and Central regions of the U.S., including the East Coast shuttle, and to expand its presence and further strengthen its network on the West Coast.

Enhanced Services
Customers will also benefit from American's landmark agreements with Airbus and Boeing, designed to transform the new American Airlines fleet over the next four years and solidify its fleet plan into the next decade. The combined airline is planning to take delivery of 607 new aircraft, including 517 narrowbody aircraft and 90 widebody international aircraft, most of which will be equipped with advanced in-seat inflight entertainment systems offering thousands of hours of programming, inflight Wi-Fi offering connectivity throughout the world, and "Main Cabin Extra" seating with 4 to 6 inches of additional legroom in the Main Cabin. In addition, as currently provided on US Airways' Airbus A330 international Envoy service, American's new transcontinental and international widebody aircraft will feature lie-flat, all-aisle access premium class seats.

Largest Loyalty Program
As a US Airways Dividend Miles member, you will be able to enjoy unparalleled benefits. Here are some of the benefits the combined company will offer our members:
  • Even more opportunities to earn and redeem miles from an expanded global network of routes and partnerships;
    • 122 new destinations through which to redeem miles
    • Earn miles with more than 1,000 participating companies, including more than 20 airline partners
  • Unmatched redemption options including flights, hotels, car rentals, vacation packages, one-way awards and club memberships; and
  • Worldwide benefits through the oneworld Alliance.
Until the merger is complete, US Airways and American Airlines will remain separate companies and each company will maintain its current loyalty programs (US Airways – Dividend Miles and American Airlines – AAdvantage[SUP]®[/SUP]). In the meantime, your existing miles will continue to be honored, and there will be no impact to your US Airways MasterCard[SUP]®[/SUP] or US Airways Visa[SUP]®[/SUP] card. You can continue to book travel and track and manage flights and frequent flyer activity on www.usairways.com. You can also continue to earn and redeem mileage for travel awards with us and our Star Alliance[SUP]™[/SUP] partners.

We expect the combination to be completed in the third quarter of 2013. Additional information will be provided to customers of our frequent flyer program on any future program updates, including account consolidation or benefit alignment. In the meantime, please visit www.usairways.com/arriving for the latest information.

We are committed to providing you with safe and reliable service, and we look forward to continuing to serve you on US Airways and on the new American Airlines.

Sincerely,
Doug-sig_120.png

Doug Parker
Chairman and CEO, US Airways
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Hmmm - Does anyone know how the previous mergers up in the US have gone for the FF members? Have the miles been exchanged 1:1?
 
Again the third quarter is only when they expect the regulatory approvals for the merger to be given.Likely it will be a while after before the loyalty programs are merged.
 
drron said:
Again the third quarter is only when they expect the regulatory approvals for the merger to be given.Likely it will be a while after before the loyalty programs are merged.
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This from FT, I think we don't have to think this will happen in a hurry!

American-US Air Merger: the Winners and the Losers | FrequentFlier.com

Before actually beginning the hard work of merging the two airlines’ operations and workforces, the deal must be approved by the bankruptcy court and federal regulators. American expects the deal to close in the 3rd quarter of this year, but that may be overly optimistic. United and Delta required five and seven months respectively to secure the necessary approvals for their mergers.
The frequent flyer program integration will take even longer. It was 22 months after their merger closed before United and Continental merged their frequent flyer programs. Expect a similar post-close interval before American and US Airways consolidate their programs.
 
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