Airline Merger Will Be Completed Monday

December 08, 2013

Al Macias - KJZZ
US Airways plane at Phoenix Sky Harbor Airport.

It’s been almost a year since it was first announced. Now the long-awaited merger between Tempe-based US Airways and American Airlines will be completed Monday. Passengers won’t see any changes until after the holiday travel rush.

The airline will be known as American Airlines and headquarters will be located in Fort Worth. The chief executive officer will be current US Airways head, Doug Parker.

Some managers have already relocated to Texas and went to work Monday at the new corporate offices.

"They’re the point of the spear, if you will, and we will continue to build people out over to Dallas over the next six to eight months, at least," said US Airways spokesman John McDonald.

The biggest staffing changes locally will happen at the US Airways headquarters in Tempe, where about 750 people work in management and administration. Some will be laid off or asked to move, but how many hasn’t been figured out yet. McDonald says the building will remain staffed for “a long time to come.”

Most visible changes will be a long time coming. Passengers will continue to see the U.S. Air logo on planes and crew uniforms. Airport signs and gate assignments around the world will have to be changed, and repainting a fleet of 300 aircraft could take about three years.

American Airlines changed its logo in January, now its new leaders may have to decide if they should change the logo again or keep the new old logo.

One of the biggest challenges will be merging the two airlines' reservations systems. For now, customers can still buy tickets and check in for flights at two separate websites.

John McDonald says elite frequent travelers on both airlines will see their benefits merge.

"In early January, we’re going to make sure people have reciprocity that makes sure they can earn miles and burn miles on both
carriers," McDonald said.

Labor issues such as seniority and combining the thousands of employees from the two airlines into one unified workforce will also be a challenge. In-flight training, maintenance procedures and other administrative policies must be integrated. Robert Mittelstaedt of ASU's W.P. Carey School of Business says getting that right is important.

"In the long run the merger will be judged as to whether or not they completed effectively and can make money, but in the short run, if they don’t do those things very, very well, they’ll anger a lot of people and do a lot of damage," Mittelstaedt said.

The merger faced several legal hurdles, including opposition from the U.S. Justice department which signed off on the deal last month after the airlines agreed to give up valuable gates at Reagan National airport in Washington. The new airline will be the largest in the world.

Updated 12/9/2013 at 1:57 p.m.