US Airways-AA Merger set for Mid-December

[Foreigner]

Reports that the merger is agreed to by government and expectation of merger to complete before Christmas.

With the most recent offer to buy/share miles, to expire end-Nov, I reckon the value will drop unless I use them before merger to get bookings.

Here are thoughts of Rocky, a FF blogger:

http://upgrd.com/blogs/doublewidesfly/doj-approves-usaa-merger.html

 

[markis10]

Formal statement:

AMR CORPORATION AND US AIRWAYS ANNOUNCE SETTLEMENT
WITH U.S. DEPARTMENT OF JUSTICE AND STATE ATTORNEYS GENERAL


Settlement Allows for Completion of Merger in December


FORT WORTH, Texas and TEMPE, Ariz, – AMR Corporation (OTCQB: AAMRQ), the parent company of American Airlines, Inc., and US Airways Group, Inc. (NYSE: LCC) today announced that the airlines have settled the litigation brought by the U.S. Department of Justice (DOJ), the States of Arizona, Florida, Michigan and Tennessee, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia challenging the merger of AMR and US Airways. The companies also announced an agreement with the U.S. Department of Transportation (DOT) related to small community service from Washington Reagan National Airport (DCA).


Tom Horton, chairman, president and CEO of AMR, and incoming chairman of the board of the combined company, said, “This is an important day for our customers, our people and our financial stakeholders. This agreement allows us to take the final steps in creating the new American Airlines. With a renewed spirit, we are about to create the world’s leading airline that will offer, along with our oneworld® partners, a comprehensive global network and service by the best people in the business. There is much more work ahead of us but we’re energized by the challenge and look forward to competing vigorously in the ever-changing global marketplace.”


Doug Parker, chairman and CEO of US Airways, and incoming CEO of the combined airline, said, “This is very good news and we are grateful to all who have made it happen. In particular, we are thankful to our employees, who throughout this process continued to believe in a better future as one airline and who voiced their support passionately and consistently. We also want to thank the elected officials in the states and communities we serve, the business leaders in our hub cities, and the thousands of customers who endorsed and supported this effort. Thank you as well to the U.S. Department of Justice, the state attorneys general and the U.S. Department of Transportation. We are pleased to have this lawsuit behind us and look forward to building the new American Airlines together.”


Under the terms of the settlement, the airlines will divest 52 slot pairs at Washington Reagan National Airport (DCA) and 17 slot pairs at New York LaGuardia Airport (LGA), as well as certain gates and related facilities to support service at those airports. The airlines also will divest two gates and related support facilities at each of Boston Logan International Airport, Chicago O’Hare International Airport, Dallas Love Field, Los Angeles International Airport, and Miami International Airport. The divestitures will occur through a DOJ approved process following the completion of the merger. Despite the divestitures, the new American is still expected to generate more than $1 billion in annual net synergies beginning in 2015, as was estimated when the merger was announced in February.


After completion of the required divestitures, the combined company expects to operate 44 fewer daily departures at DCA and 12 fewer daily departures at LGA than the approximately 290 daily DCA departures and 175 daily LGA departures that American and US Airways operate today. The divestitures required by the settlement are not expected to impact total employment at the new American.


To ensure much of the service currently operated by the carriers to small- and medium-sized markets from DCA is maintained, the new American has agreed with the DOT to use all of its DCA commuter slot pairs for service to these communities. The new American intends to announce the service changes that will result from the divestitures in advance of the sale of the DCA and LGA slots, so that the airlines acquiring those slots have the opportunity to maintain service to those impacted communities.


In the settlement agreement with the state Attorneys General, the new American has agreed to maintain its hubs in Charlotte, New York (Kennedy), Los Angeles, Miami, Chicago (O'Hare), Philadelphia, and Phoenix consistent with historical operations for a period of three years. In addition, with limited exceptions, for a period of five years, the new American will continue to provide daily scheduled service from one or more of its hubs to each plaintiff state airport that has scheduled daily service from either American or US Airways. A previous settlement agreement with the state of Texas will be amended to make it consistent with today's settlement.


Completion of the merger remains subject to the approval of the settlements by the U.S. Bankruptcy Court, and certain other conditions. The companies now expect to complete the merger in December 2013.

http://newamericanarriving.com/news...s-announce-settlement-with-u.s.-department-of

 

[cove]

If you have not taken up your latest US Air Dividend Miles 100% offer then you are missing a very generous offer. The chance to get 100,000 miles will not be offered by AA unless they change their ways. Their best recent offer was buy 60,000 and get 30,000 bonus.

 

[Foreigner]

If you have not taken up your latest US Air Dividend Miles 100% offer then you are missing a very generous offer. The chance to get 100,000 miles will not be offered by AA unless they change their ways. Their best recent offer was buy 60,000 and get 30,000 bonus.

I agree but only if you use those miles prior to merger.

If miles remain unused, sitting in the new AA FF account they may not be as useful as they are now with Star Alliance award tickets. Stand to be hear other views.

 

[smit0847]

I am very, very sad to hear this news. I was hoping, at best that the DOJ objections would can the merger, and at worst, that they would battle it out in court for at least a year. I came into the DMs game quite late, having only taken my first trip this year but the possibilities are limited sometimes only be your imagination given how inconsistent the call centre agents are (we all have a story about something we got away with!).

I have 2 accounts both with the buy offer this month and am now very torn as to whether I should buy miles purely so they become AA miles. I believe AA miles are worth far more than USDM miles (when you cna use them) however there are far less uses for them. I have all my international travel planned for the next 18 months without the need to use more USDM or AA miles so would only be buying them to hold for probably 2 years which I recognise is a bad move considering the miles will never get more valuable (AA may do a UA devaluation), only less. I don't even know what I would use AA miles for - HKG I guess?

 

[markis10]

I don't even know what I would use AA miles for - HKG I guess?

Anywhere in Australia/NZ in J for 17.5k is a good start.

 

[aikman]

I personally can't wait for my USDM miles to become AA miles. I think USDM has limited uses restricted to return J trips to Europe, US and South Pacific (Asia is poor value). AA miles opens up so many more possibilities - online booking, one way awards, oneworld explorer awards...

 

[smit0847]

I personally can't wait for my USDM miles to become AA miles. I think USDM has limited uses restricted to return J trips to Europe, US and South Pacific (Asia is poor value). AA miles opens up so many more possibilities - online booking, one way awards, oneworld explorer awards...

While I agree the 'sweet spots' for USDM are Europe, the US and a certain US territory in the Pacific and it is poor value to Asia I think the lack of availability is going to be the biggest complaint of DMs becoming AA miles. People thinking 'yay, no more UA across the Pacific, I can just use QF' are dreaming. I think apart from Asia, QF long-haul availability will be virtually non-existent. It's good that MH and QR are now part of OW and seem to have generous availability (I can see MH being the 'new TG') but I don't think there will be nearly as many options and carriers as we have now.

 

[Foreigner]

Anywhere in Australia/NZ in J for 17.5k is a good start.

Very interesting...i guess one books through AA? Is there link to table showing this and other options?

 

[Rallo]

Very interesting...i guess one books through AA? Is there link to table showing this and other options?

http://www.aa.com/i18n/disclaimers/aadvantageAllPartnerChart.jsp

 

[serfty]

Upcoming milestones about US and oneworld.

To summarize:
- Court hearing 25 November (For Judge [-]approval[/-] rubber stamp)
- Early December - the deal closes
- 7 January 2014 - this is a "big day"- integration of the frequent flyer programs

With *A and *O, US has been in the process of exiting *A for a few months in terms of not selling *A tickets - plans to be in OW in January.

Here's an Article: American Airlines-US Airways Merger: What Frequent Travelers Need to Know

 

[CaviAck]

Are there still any US Air mile promo's? Or am I too late to join the bandwagon.... Thinking with the lack of status it might be a cheap way to fly J hahaha.

 

[hummel]

Are there still any US Air mile promo's? Or am I too late to join the bandwagon.... Thinking with the lack of status it might be a cheap way to fly J hahaha.

There is a promo this month but unless your already a member you may be out of luck...

 

[CaviAck]

There is a promo this month but unless your already a member you may be out of luck...

I guess I'm out of luck

 

[dk4]

- 7 January 2014 - this is a "big day"- integration of the frequent flyer programs

I think that the 7th January date is for "reciprocation" not "integration"? Won't integration happen at a later stage in 2014, when the Dividend Miles brand ceases to exist, and its memberships are folded into the AAdvantage brand.

"Reciprocation" on January 7th will mean that AAdvantage members will be able to earn and burn on US flights and Dividend Miles members will be able to earn and burn on AA flights, and presumably Admirals Club and US Airways Club members will also gain reciprocal access to each others facilities.

 

[CaviAck]

I think that the 7th January date is for "reciprocation" not "integration"? Won't integration happen at a later stage in 2014, when the Dividend Miles brand ceases to exist, and its memberships are folded into the AAdvantage brand.

"Reciprocation" on January 7th will mean that AAdvantage members will be able to earn and burn on US flights and Dividend Miles members will be able to earn and burn on AA flights, and presumably Admirals Club and US Airways members will also gain reciprocal access to each others facilities.

Does that include burn on awards flown on OW carriers?

 

[serfty]

Does that include burn on awards flown on OW carriers?

I would suggest that "plans to be in OW in January" would indicate that one should not expect to be able to redeem *A awards with DM in February.

I think that the 7th January date is for "reciprocation" not "integration"? Won't integration happen at a later stage in 2014, when the Dividend Miles brand ceases to exist, and its memberships are folded into the AAdvantage brand.

"Reciprocation" on January 7th will mean that AAdvantage members will be able to earn and burn on US flights and Dividend Miles members will be able to earn and burn on AA flights, and presumably Admirals Club and US Airways Club members will also gain reciprocal access to each others facilities.

Before the DoJ filed their suite in August there was strong information around that US would completely exit *A on Nov 1 after having reciprocation from September 1.

I would expect them to be well ready for January 7th.

And, as was discussed back in August: http://www.australianfrequentflyer....join-oneworld-affiliate-51566.html#post867340

Maybe I'm cynical but I personally think getting all of those three outstanding approvals in a month is ambitous. I'm also a bit suspicious about the suggestion that a day after legal merger close they will have integration to be able to credit to an AA F number. That's a lot of IT work to have done on a deal not yet approved and frankly am not sure you could test it (would sending real live customer details accross to AA to test this out even be allowed for a deal that has not been approved by the court, its surely a breach of privacy to share my data with AA in the absence of an approved merger)?.

The point I was mainly making is that it is quite likely that USair will operate as a *O carrier prior to the merger being fully consummated (including that of FF systems) and this is likely to occur before 2014.

That is much less than 22 months and given executives have cited such, the end of 2013 will almost certainly see this.

Also note, there is now only the one regulatory hurdle left - that of the (perceived "Rubber Stamp") confirmation by the Judge on November 25th,

 

[straitman]

A fairly comprehensive article on the way forward.

DOJ Deal Should Allow Creation Of World's Largest Airline Within Weeks


By Darren Shannon [email protected]
Source: AWIN First

November 12, 2013
Credit: AMR Corp.

AMR Corp. and US Airways are just weeks from finalizing their proposed merger, following a settlement deal with the U.S. Justice Department (DOJ) that calls for the divestiture of slots at Washington Reagan National Airport and New York LaGuardia Airport as well as gates at Boston Logan International, Chicago O’Hare International, Dallas Love Field, Los Angeles International and Miami International airports.

The deal comes three months after the DOJ and six state attorneys general filed a court motion to stop the merger based on claims it would stifle domestic competition. That case was due to start Nov. 25, but has now been superseded by this new settlement.

The merger now awaits the approval by AMR’s bankruptcy judge of this divestiture agreement, which AMR and US Airways expect in the coming weeks. In a letter to employees, AMR Chairman and CEO Tom Horton and US Airways Chairman and CEO Doug Parker (who also will be CEO of the “new American”) say the accord with the DOJ “allows us to complete the merger next month . . . [and that] we look forward to celebrating the creation of the new American with all of you within a few weeks.”

AMR already has asked for an expedited hearing to discuss the DOJ settlement that has been scheduled for late November. If approval is granted by AMR’s bankruptcy judge, the merger is likely to be concluded mid-December.

It is no surprise that the new American is being asked the divest slots at the capacity constrained Washington National and LaGuardia airports, but the call to transfer gate rights at Boston—once an AMR stronghold but now a major base for JetBlue Airways—as well as at American’s hubs in Chicago, Los Angeles and Miami, while rumored, was less expected.

The surprising inclusion of American’s two gates at Love Field, which are currently leased to Delta Air Lines, will allow “a low-cost carrier to provide vigorous competition to the new American’s nonstop and connecting service out of” AMR’s base at Dallas/Fort Worth International Airport when slot constraints at Love Field are lifted next year, explains the DOJ. Love Field is the home of Southwest Airlines.

Southwest and JetBlue are the initial beneficiaries of the settlement, which the DOJ prompts as “guaranteeing a bigger foothold for low-cost carriers at key U.S. airports.” Under the deal, JetBlue takes ownership of the 16 slots it currently leases from AMR at Washington National, while Southwest obtains the 10 slots its leases from AMR at LaGuardia.

AMR also must divest a further 88 slots at National and 34 at LaGuardia, which will be bundled and offered for sale at a time that has not been disclosed by the DOJ. “Preference will be given to airlines at each airport that do not currently operate a large share of slots or gates,” the DOJ notes, adding that other low-costs will be preferred should JetBlue or Southwest not take the slots assigned to them.

But low-cost airlines will face competition from Delta, which just minutes after the DOJ’s deal was announced said it “welcomes the settlement agreement and looks forward to the opportunity to acquire slots that will be divested under the agreement, particularly at Washington Reagan National Airport. Delta is the airline best-positioned to continue competitive nonstop flights from Reagan National to small- and mid-sized cities that could otherwise see service reduced or eliminated, which should be a strong consideration in the divestiture.”

Next Page

 

[Foreigner]

From USA Today.com:

"Airways President Scott Kirby said on Tuesday that US Airways is aiming for a "quick" exit from Star, and that the transition to oneworld would begin during the first quarter of 2014."

More on the story here:

http://www.usatoday.com/story/today...ats-next-for-aa-us-airways-customers/3508817/

 

[burmans]

I think that the 7th January date is for "reciprocation" not "integration"? Won't integration happen at a later stage in 2014, when the Dividend Miles brand ceases to exist, and its memberships are folded into the AAdvantage brand.

"Reciprocation" on January 7th will mean that AAdvantage members will be able to earn and burn on US flights and Dividend Miles members will be able to earn and burn on AA flights, and presumably Admirals Club and US Airways Club members will also gain reciprocal access to each others facilities.

This is what I think is more likely in some form, I still hold that the likelihood of a company who's IT is generally regarded as a heap of cough getting full integration with both AA and Oneworld by 7th Jan is fanciful to say the least. Sure they can probably get some ability to use US points for OW up and running by that stage but that to me is a long way short of "integration". But I guess time will tell.