When US Airways and American Airlines merge, there will be a great deal of talk about synergies and how they are complementary.  And if it isn’t about that, it will be people talking about how they aren’t complementary and that this is a shotgun wedding.  Everyone will be critic and that includes me.

So I’m going to do it now.

I have actually liked the idea of an AA / US Airways merger for a while.  I do see US Airways bolstering AA’s domestic network in certain areas.  What I never liked was the idea of an AA executive running the show because the first thing that would be done is a shutdown Phoenix and probably Charlotte, NC, too.  That’s what American Airlines executives do when they merge an airline.

Many will see Phoenix get drawn down into insignificance in this merger because of AA’s focus on Los Angeles.  I disagree.  I think you’ll see a distribution of flights and the network between the two cities.  I think Los Angeles will be used for a West Coast gateway to the Pacific and Asia but I think Phoenix will continue to be used to focus domestic connecting traffic in the Western United States.  It’s a more practical hub to use for that.  Los Angeles and particularly LAX is not the airport to use for that kind of thing.  You use LAX to connect traffic in California and to foreign destinations.  You don’t use it to connect traffic to Tuscon.  Bottom line:  I think both remain hubs.

Dallas and Chicago stay right where they are.  They probably add some flights but nothing really changes in a big way.

Charlotte, North Carolina stays.  It fits much better into the Southeast United States as a connecting hub than Miami.  Miami is a miserable place to connect to anything but the Caribbean & South America.  Charlotte is a great place to connect to cities all over the Southeast and will help AA bracket both Delta and Southwest Airlines in that area.

Philadelphia will remain a hub and may see more traffic connecting there for foreign destinations.  New York is a miserable place to connect for anything including foreign destinations.  Philadelphia will remain a strong domestic city and we may well see some expansion of flights to and from this city from AA strongholds.

New York City remains much as it is with some increased network feed to AA flights to Europe and foreign destinations.  The new airline isn’t going to cede ground even more in this city and it has an obligation to work to feed its Oneworld partners there.

Miami is named as an AA hub.  It’s really more a gateway city just like LAX and New York City are.  Miami will neither increase nor decrease in importance.  I expect more domestic feed to Miami to connect to foreign destinations but that’s it.

There isn’t really much route overlap between the two airlines.  There isn’t much consolidation to see from this merger.  This will be about redistributing resources to maximize revenue opportunities and domestic routes will get shifted around and replanned around new opportunities.

Filed under: Mergers and Bankruptcy by ajax