Advertisement

Travel Tuesday Top 10: Potential Positive Changes and Negative Changes of the US Airways American Merger

by on February 19, 2013 · 11 comments

in American, Top 10, US Airways

As an American Executive Platinum and someone with several hundred thousand US Airways miles that I want to put to good use, I’ve got more than my fair stake in the outcome of the US Airways American Airlines merger – as do many of you, I’m sure. If past mergers are anything to judge by, there are bound to be a lot of headaches and hassles ahead of us, but there could also be many positive changes that we can all benefit from. Whether we like it or not, it’s happening, so we might as well try to find the bright side.

American and US Airways Merger Announced

What will happen when the merger finally goes through?

That said, I’m sure that there will be several negative changes as well. So in a bit of a change-up from the usual Travel Tuesday Top 10, I figured I’d put together a list of 10 good things that could come of the merger and their inverses, which are equally possible. So read on and tell me which ones you think will come to pass.

1. Elite Status Tiers

Positive: Both airlines could adopt US Airways’ four elite status tiers including a Platinum level at 75,000 miles. Right now, American AAdvantage only has three tiers – Gold at 25,000 miles, Platinum at 50,000 miles, and Executive Platinum at 100,000 miles, which is when the real benefits start kicking in, like complimentary upgrades in certain zones, systemwide upgrades and more, but that 50,000-mile gulf between Platinum and Executive Platinum is a wide one to cross, and one that requires true commitment (well, that’s the point of a loyalty program). If both airlines choose a four-tier system instead, those flyers who can make it to 75,000 miles but not quite to the 100,000 necessary for Executive Platinum or Chairman’s Preferred should at least get some additional benefits conferred on them.

American currently has three tiers while US Airways has four.

American currently has three tiers while US Airways has four.

Negative: On the other hand, both airlines could adopt AAdvantage’s three-tier system instead, and all those mid-range flyers in the 75,000-mile gray area will lose privileges like complimentary domestic upgrades. Or the airline could simply strip away some of the mid-tier benefits that even American Platinums (currently equivalent to US Airways Golds) receive like a 100% mileage bonus in favor of US Airways’ bonus structure which is 25% for Silver, 50% for Gold, 75% for Platinum and 100% only for Chairman’s Preferred members. Even though American doesn’t give complimentary upgrades for their Gold and Platinum members, this system reduces the amount of overall requested upgrades so they can be easier to get when you actually want one – something that I personally wouldn’t want as a mid-tier flyer, but I recently had a lively Twitter discussion about with several die-hard AA Platinums who truly fear complimentary upgrades.

2. Million Miler Status

Positive: I wrote about this hot-button topic on Friday, but the basics are that American’s Million Miler program is much more sophisticated, with 3 tiers: at 1 million miles, AAdvantage members receive lifetime AAdvantage Gold status and 35,000 AAdvantage bonus miles; at 2 million miles, AAdvantage members receive lifetime AAdvantage Platinum status and 4 one-way systemwide upgrades; at each additional million miles, AAdvantage members receive 4 one-way systemwide upgrades. That can get to a decent slate of perks and lifetime Platinum status isn’t a bad deal. Because American’s program is more advanced, I expect this one to be the model they keep, and the good news is, after the merger goes through, you should be able to combine your lifetime miles from both programs, getting you even closer to Million Miler status.

American's Million Miler program is much more sophisticated than US Airways'.

American’s Million Miler program is much more sophisticated than US Airways’.

Negative: The new airline could decide to do away with American’s system going forward (hopefully current Million Milers will get to keep their benefits in order to avoid a United-like lawsuit situation) in favor of US Airway’s simple, one-tier Million Miler program which just awards lifetime Silver status to members who hit one million miles and keep their accounts active. Measly Silver status with nothing to aim for beyond it? Not terribly motivating.

3. Award Flexibility

Positive: The new airline allows one-way awards and domestic gateway stopovers. Basically this would be adopting two of the best aspects of AAdvantage awards by allowing one-way award – providing ultimate flexibility when flying into and out of different cities, or even using your American miles for one direction of an award itinerary, and another airline’s like United’s for the other direction. US Airways only allows roundtrips, though you can structure in a stopover or open jaw, which does add flexibility. American also lets you add another leg onto your award by giving you one stopover in a North American gateway on an international itinerary, giving flyers even more bang for their miles. Additionally, American allows any member to change the date of their award ticket for free, as long as the origin and destination remain the same. US Airways charges $150 per change per ticket and you cannot make any changes once a trip has begun.

Negative: US Airways currently allows huge flexibility in routing of awards and international stopovers/open jaws and if these rules go away, many people stand to lose out on the ability to construct complex and creative awards. While AA allows stopovers at the domestic gateway city, this isn’t very helpful for those who live outside of these hubs and can’t build in “free” stopovers.

4. Consolidating Mileage Balances

Positive: Who doesn’t love the opportunity to combine stray miles from various accounts in order to bulk up a single primary frequent flyer account? All of us have random miles floating around somewhere, so if yours are in either of these programs, this could be a good opportunity to bring them back into the fold and put them to use.

Negative: I always recommend diversifying your miles and points balances so you have maximum flexibility when it comes times to book an award. Right now I can redeem my American miles on Oneworld and US Airways on Star Alliance. Once the merger is finalized and programs merge, the new (though larger) combined account balance can only be redeemed for the 12 Oneworld and other partner flights, so say goodbye to all 27 Star Alliance options.

Get in on both US Airways and American bonuses while you can.

Get in on both US Airways and American bonuses while you can.

5. Credit Card Bonuses

Positive: For now, the airlines are still separate, as are their mileage programs and the co-branded credit cards that go along with them, which means that if you have the US Airways Mastercard from Barclays, or any of Citi’s AAdvantage cards, you can get one (or several) of the other airline’s credit cards in this window before the merger approval to earn anywhere from 35,000-50,000 miles per card in anticipation of combining your mileage balances later. The best offer on the US Airways card is this one for 35,000 miles with first purchase, the $89 annual fee waived the first year, and 10,000 anniversary bonus miles; while there are 50,000-mile offers on  Citi Platinum Select AAdvantage Visa Signature, the Citi Select AAdvantage American Express and the CitiBusiness AAdvantage Visa for spending $3,000 in four months.

Negative: We’ve already seen some lucrative offers like the 50,000-mile bonus on the Chairman’s Preferred US Airways Mastercard go away with the merger announcement and there’s no telling if those anniversary bonus miles will be offered once the card is (likely) folded into Citi’s offerings for the new merged airline, and with the credit card marketplace going one competitive bonus shorter after the disappearance of a distinct US Airways card product, it’s possible we’ll see some lower bonuses from Citi for a while after the merger.

It might make sense to buy up to Preferred status while you still can.

It might make sense to buy up to Preferred status while you still can.

6. Buy Up Your Status

Positive: One of the notoriously easiest ways to get elite status with an airline was simply to buy it from US Airways, which is still possible according to this page on their website. You could even buy up to their top-tier Chairman’s Preferred elite status for as little as $2,999 if you had even one qualifying Preferred mile in your account. Theoretically, then, you could still buy up to the elite status of your choice and then hope it carries through once the merger happens and you are granted equivalent status on both airlines while they continue to operate separately.

Negative: Chances are the option to buy elite status will go away with the merger since American has such a flyer-focused elite culture, but in the interim where some buy-up elites are in the system and benefits are likely to be conferred across both airlines, that will mean the ranks of elites in every tier are going to be even more swollen than they would be otherwise once the two programs are combined and that benefits like upgrades are going to be even harder to come by. Even if the buy-up options do increase, that just means that American elites will see inflated elite pools, which will change the dynamic of the program- AA is known to give Executive Platinum members great service, but that may go away once there are scores of newly minted (or purchased) EXP members.

7. Complimentary and Systemwide Upgrades

Positive: Both airlines offer their elite members upgrades. American also offers Executive Platinums a generous total of eight systemwides that can be used on any purchased fare class per year, while US Airways Chairman’s Preferred members only get two systemwides (also on any fare class) though they can bring along a companion. Hopefully the new airline will either keep American’s eight total or split the difference somehow, while also including US Airways’ current policy of offering unlimited complimentary upgrades to First Class within the continental US, Alaska, Canada, Central America, Mexico and Caribbean to all elites

Negative: The new airline could restrict both kinds of upgrades and only offer something like 2-4 for top-tier elites per year with no companion benefit, as well as adopting American’s system of just giving complimentary upgrades to Executive Platinum elites while making all lower-tier elites apply to use 500-mile upgrades on their flights.

Hopefully it is American's off-peak awards that are here to stay.

Hopefully it is American’s off-peak awards that are here to stay.

8. Off Peak Awards

Positive: Right now both airlines offer off-peak awards, but American’s are much more extensive and generous. For reference, here are American’s off-peak dates and regions (flying to/from North America):
Hawaii: Jan. 12 – Mar. 8; Aug. 22 – Dec. 15; The Caribbean and Mexico: Sep. 7 – Nov. 14; Central America, Colombia, Ecuador, Peru, and Venezuela: Jan. 16 – Jun. 14; Sep. 7 – Nov. 14; Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay: Mar. 1 – May 31; Aug. 16 – Nov. 30; Europe: Oct. 15 – May 15; Japan and Korea: Oct. 1 – Apr. 30. So for about six months of the year, you can get from North America to southern South America and Europe for as few as 20,000 miles each way – an incredible value on steadily increasing ticket prices.

Negative: The new airline instead implements US Airways’ much more limited off peak awards, which are as follows: Within and between the continental U.S. (including AK) or Canada and the Caribbean September 1-30; Between North America or Hawaii and South America, 2013 – March 1 – 15 & May 1 – 31, 2014 – Feb 3 – Feb 13 & Mar 17 – Apr 3; Between North America or Hawaii and Europe, January 15 – February 28. The two bright spots here are that you could get from North America to Europe for as little as 35,000 miles roundtrip in coach (US recently stopped offering off-peak to Europe for 60,000 miles) or South America for 35,000 miles roundtrip in coach or 60,000 in business. However, because the dates are a lot more limited, so is availability so it can be much harder to secure these low-level tickets.

9. Award Chart Sweet Spots

Positive: Although US Airways requires roundtrip awards and allows only one stopover or open jaw on award tickets, the airline actually has extremely flexible routing where, for example, you can book a single award traveling from the US to Asia via Europe, or the US to Australia via Asia and essentially get two trips for the price of one. It also has several great “sweet spots” such as just 50,000 miles for domestic first class on 3 cabin planes (vs using 70,000 United miles), 90,000 miles for business class to Asia, and 110,000 miles for business class to Africa (and you can go via Europe) or the South Pacific including Australia (and you can travel via Asia), so there are tons of great ways to save miles while flying in style. Between the merger approval and the final combination of airlines and frequent flyer programs, there might be just enough time to squeeze in a couple of these redemptions.

Negative: I think we’re likely to see many of these sweet spots vanish as the new airline takes American’s award structure – not least of all because the new airline will be part of Oneworld and will have to abide by American’s agreements with those airlines. Additionally, there will be more taxes/fees on awards since American tacks on $500+ fees to award for flights on their largest partner British Airways

US Airways flyers should say goodbye to award chart sweet spots like these and hello to higher fuel surcharges.

US Airways flyers should say goodbye to award chart sweet spots like these and hello to higher fuel surcharges.

- something which will be a shock to US Airways Dividend Miles members who don’t get hit with huge award fuel surcharges.

Admirals Club card

A merger probably means more clubs for members.

10. Club Access

Positive: Though you can actually get access to both Admirals Clubs and US Airways Clubs just by having the American Express Platinum card with a single $450 annual fee, when the airlines do merge, their clubs should as well, giving flyers access to more clubs around the world in more cities for one membership fee.

Negative: With terminal and hub consolidation, many redundant clubs are bound to close, so in effect you won’t be getting access to that many more clubs, and in fact, because US Airways Club membership also currently grants access not only to all US Airways Clubs, but also United Clubs and Star Alliance lounges as well, you’re losing out on a lot of lounges in the end.

American will install these new business class seats on both international and some domestic flights.

Business class on long-haul flights on the new airline’s fleet will all start to look like this.

Bonus: Premium Products

I just thought I’d end on a positive, which is the fact that American Airlines has and plans to keep its massive order for new aircraft, which will phase out some of their old clunkers and include new business and first class seats as well as updated economy offerings, and that US Airways plans to adapt its fleet to American’s new standards – which is great news for anyone who’s had to endure a transcontinental flight on US Airways’ outdated planes lately. Not only that, but US Airways is already ahead of the curve with its award-winning international Envoy business class product on its international fleet, so both airlines are well positioned to take a big leap forward in terms of in-flight experience.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

Previous post:

Next post:

  • Joe

    Re #8, do you predict that the new American will be much less generous with the seasons for off-peak awards?

  • Pth

    The difference between American and USAirways treatment of elites is far larger than just a three tier vs. four tier. Recognizing that you touched on these points, the above is written largely from the perspective of a 1k/year flyer.

    Switching to the AA system would incredibly devalue USAirways status for anyone below Chairmans. The unlimited domestic upgrades is one of the few perks that actually get used by USAir platimum/gold/silver. Even if the combined system affords that perk to USAir platinums by going to a 4-tier system and expanding the AA perk, it represents a devaluing of gold and silver flyers.

    The one saving grace is that if they go to a 100% gold mileage bonus, the extra 50% boost covers the 500-mile upgrade covers the upgrade cost. If they go super cheap – AA upgrade system and USAir mileage bonus – it would be a very, very significant cut to USAir golds.

  • scbelle

    Is the 50K miles offer on the Citi cards still available? The links are going straight through to a form page and not the 50K bonus that they were last week… (I know, why didn’t I sign up last week? I had to wait for a legal name change to go through on my AA account. Boo.)

  • AirDoc

    what do you think will happen to fares?

  • thepointsguy

    Yes according to the flyertalk thread- I haven’t personally applied for one in a while

  • thepointsguy

    In the long run, go up, but I don’t see anything drastic happening

  • thepointsguy

    I hope they are, though I could see that going away. Book them now while you can

  • SCBelle

    Thanks… applied/was approved; not sure how long miles take to post so we’ll see! Thanks :)

  • Adamu98

    any idea what the cutoff date be for using us air miles on star?
    thanks

  • JG

    I live in Asheville, NC, a destination currently served by US Air, but not by AA. Do you think the new AA will keep the routes out of Asheville?

  • Custerja

    Quick question that you may have the answer to…I am current US Airways Gold and am looking to book a flight to Lima, Peru, this November. Currently, Star Alliance (TACA and Copa) are the cheapest, and I want to book them. BUT American is not too far off their price. Is there any more clarity on whether US will have left Star Alliance by November and joined OneWorld? Either way, the mileage and status on these flights is most important to me, and all US is telling me is “we hope to have closed and merged completely by the third quarter.” I know United and Continental didn’t have these hiccups because Continental moved to Star in advance of the merger. This is stressing me out lol. And prices are really good right now…Thoughts?

Print This Page