US Airways Airbus A330 and American Airlines Boeing 777. Image from American.
Ever since American Airlines declared bankruptcy in November 2011, Doug Parker from US Airways has been on the prowl to snap up the airline and merge.Â Talk of a possible merger has remained around the aviation world since then, and in some cases it has been discussed to the ends of the earth. It really shouldn’t have been much of a surprise when news that the two airlines would merge started to leak last night.
The two airlines will combine and create one of the world’s largest airlines.Â The combined entity will lose the US Airways name and will become a member of oneworld.Â The â€œNew American Airlinesâ€ will strengthen oneworld with a combined network of 336 locations in 56 countries offering 6700 daily flights.
â€œToday, we are proud to launch the new American Airlines â€“ a premier global carrier well equippedÂ to compete and win against the best in the world,â€ said Tom Horton, Chairman, President, and ChiefÂ Executive Officer of American Airlines. â€œTogether, we will be even better positioned to deliver for allÂ of our stakeholders, including our customers, people, investors, partners, and the many communities weÂ serve.”
The New Merging Couple, US Airways and the New American Airlines Liver – Image: American Airlines
What does this mean for the traveling public?Â The two airlines will continue to operate separately for quite sometime and it might be a while before most passengers see any real changes. But here is the basic run down:
- The US Airways brand will be transitioned to the new unveiled American Airlines brand and look.
- The head quarters of the new American will be located in Dallas Fort-Worth.
- All hubs will remain in the combined operation: Dallas, Miami, JFK, Philadelphia, Phoenix, Chicago, Charlotte, Washington D.C. (National) & Los Angeles.
- US Airways will leave Star Alliance and the new combined airline will continue with oneworld
- American CEO Tom Horton will continue to be to the chairman — for now.
- US Airways Dividend Miles will no longer exist and will be merged into AAdvantage (but as to when this still has not been announced).
- They will continue to grow the combined airline taking delivery of over 600 new aircraft (including Boeing 777-300ERs & 737-800, Airbus A350s, A320 & A321 NEOs) and retiring the older aircraft (ie MD-80’s).
How will this livery look on an Airbus A330? Â Image from American.
The new airline does not expect many jobs will be lost due to the two airlines not having much overlap. â€œWeâ€™re not anticipating any major layoffs,â€ said US Airways CEO Doug Parker according to the Airline Biz Blog. â€œThe airline will be based in Dallas-Fort Worth and some people wonâ€™t want to move from Phoenix [US Airways is based there]. Most of this well take care of itself.â€
When the Airline Biz Blog asked the airline CEOs about their regional counterparts (American Eagle and US Airways Express), they explained that they want to concentrate on the mainline before looking at the regional carriers. â€œWeâ€™ll keep them as part of the larger airline,” Parker explained. “Itâ€™s one of those things weâ€™ll have to work on over time, but certainly thereâ€™s nothing to announce.â€ Horton was asked about the possibility of the regional carriers being spun off and responded, “Weâ€™ll keep them as part of the larger airline. Itâ€™s one of those things weâ€™ll have to work on over time, but certainly thereâ€™s nothing to announce.”
With an on-board premium product that is already similar (US Airways Envoy class uses the same seats that the New American airlines does on their 777-300ER) and with a modern fleet, we can hope that this will be a positive match. It is likely that AA/US do not plan to experience some of the same issues that plagued the United/Continental merger and as long as everything goes smoothly, the new American will be official once it clears bankruptcy court in the 3rd Quarter of 2013.
MORE AMERICAN AIRLINES / US AIRWAYS MERGER STUFF:
Story written by Malcolm Muir and David Parker Brown
United aircraft in new and old livery.
Being the world’s largest airline has its benefits, but there are also going to be negatives. The larger and more complicated you are, the more that can go wrong. Then add in a merger to the mix and you are just asking for trouble.
United Airlines had a bit of a challenging week this last week and it raises some questions. Even though some mistakes were made, it was sad to see how much of the media grabbed on to the stories, even after the stories were already resolved. Let’s take a closer look at what happened:
UNITED CHANGES ON TWITTER
Previously, United and Continental had two separate Twitter accounts (@UnitedAirlines and @Continental). United had about 194,000 followers and Continental had about 144,000. Having 338,000 followers is quite impressive, but this is where things go wrong. Twitter told United that they can’t combine both accounts. It seems silly that Twitter wouldn’t budge, even for money, but I guess that is how it goes. That didn’t mean that United had to give up all their followers.
With Twitter you can change your account name and still keep your followers. So the question becomes, should the new United take the old United account or the Continental? Sure, alienating either group of followers isn’t the best idea, but neither is giving up 338k followers to start a brand new account — which is exactly what United did.
I really like the idea of United changing their Twitter handle to just “@United,” but they have had one heck of a time getting anyone to follow. Out of 338,000 followers, as of late Friday there are just short of 10,000.
Since the new “@United” handle has been used, it has mostly been interacting with customers who have had bad experiences. Sure, it is great to reach out to your Twitter followers to help them, but if someone just reads the Twitter feed, it looks like nothing goes right at the airline. When responding to a poorly placed ad (see below), they sent the exact same message to over 100 people. That is not the proper way to handle the situation. It is okay to post just one reply to everyone.
I think Delta Air Lines has a slick system with @Delta to keep positive @DeltaAssist to help travelers with issues and @DeltaNewsroom to interact with media. That way fans of the airline that are watching @Delta see positive and helpful information and those customers who have issues still get help by @DeltaAssist.
AD IN NEW YORK CITY
Honestly, I wouldn’t have even known about this ad, except for the fact that United was apologizing to hundreds of people about the ad via Twitter. Anyhow, it looks like United put up an ad that states by ground zero in New York City stating, “You’re going to like where we land.” Okay, maybe not the best call, but come on people. This was an outside ad agency that placed the ad. Do you really think United wants to be associated with what happened on 9/11? They made a mistake, they are correcting it, they are apologizing, now let’s all move on.
REINSTATING 9/11 FLIGHT NUMBERS
With the merger of United and Continental, a computer system assigned the old flight 93 and flight 175 to current Continental Airlines flights. Currently, all flights fly both as United and Continental, so it would appear that United flight 93 and 175, which were involved in 9/11, were flying again. It was an honest mistake that was unintentional.
This was not a group of employees sitting around and deciding to re-instate the old flight numbers. It was more disturbing how big this story got versus what actually happened. Even after the flight numbers were explained, I saw legitimate news sources still waving the “omg why would United do this?” blame flag. I ended up more disappointed in the media than I did with the airline on this one.
New Branding at Chicago
CUSTOMER DAY ONE
Say what? I wonder if many of you even know about this. On Wednesday United unveiled their new look and brand at their main hub at Chicago’s O’Hare International Airport (ORD). United put up all new signs and there are no more tulips to be seen. Even though it is sad to see the tulips go, this was a big day for United, their employees (Continentals too) and even for the city of Chicago. Unfortunately this story got shoved under the rug due to all the other things going on this week.
United might have dropped the ball a few times, but what company doesn’t? It just seems that airlines get unfair attention put on them when they do mess up and it keeps the idea that airlines are some evil company.
We can only hope that next week will be better!
United's new livery on an Airbus A319 (N853UA)
Here is the first Airbus A319 in the new United/Continental Livery. I know it has been quiteÂ controversialÂ and many of you readers have totally hated this new United livery. As I have said before, the more I see it, the more I get used to it and the more I like it. I actuallyÂ think it looks best on this smaller Airbus A319 than it has on the Boeing 777 or in a Boeing 747 mock up. You can check out quite a few photos of the old and new livery of this Airbus A319 on Airliners.net. One exciting part of this combination, is we have never seen the “Continental livery” on an Airbus A320-family aircraft before. Has this “new livery” grown on you at all?
I was emailed this photo a few days ago and have been trying to track down the owner to give proper credit. If you know where this came from, please let me know.
Click for a larger version
I guess the big news should be that the merger between United Airlines and Continental Airlines has gone through. yea, that is big news, the new United is now the largest airline in the world. However, this wasn’t a big shock it was going through. I am a bit more excited about these six photos of the new combined livery.
Hmm. When I saw the mock-up on the Boeing 787 I really liked it, especially with the new font. Now, I don’t know what to think seeing it on a real Boeing 737. Well my first reaction is it looks like a Continental Boeing 737 with the wrong title on it. Nothing that different or radical.
I think I will hold my final reaction with a bit more time. Right now my mind is having a hard timeÂ processingÂ “United” on the side of a plane with Continental livery. I am sure after seeing it for a while it will start to look normal. I mean I really like the Continental livery and I like the look of this livery, I just think my brain is having a hard time computing the combination. I didn’t think I would miss the current United livery, but I think I might miss it a bit now.
What are your thoughts?
UPDATE: check out the livery in United Express set up and the new livery on a Boeing 757.
Northwest Airlines Boeing 757
There has been a lot in the news about airline mergers and buy outs. Delta & Northwest, United & Continental and most recently AirTran & Southwest. Some in the media throw around “merger” and “takeover” interchangeably, but they are very different. When two airlines come together, there are two types of sale agreements: the merger and the takeover.
I got an email from a reader (thanks Jay) asking about the difference between an airline merger and take over. I am not a financial professional, but I want to try my best to point out the major differences. If you have any more to add, please feel free to leave a comment!
This is when two companies come together blending their assets, staff, facilities, and so on. After a merger, the original companies cease to exist, and a new company arises instead. Sometimes the new entity will take the name and brand from one of the airlines, but sometimes an entirely new brand can be created.
Delta and Northwest merged, leaving the Delta brand. United and Continental merged, which will leave the United brand. In mergers like these, management needs to work hard to come to certain agreements, figure what/who will be cut and how the new airline will operate. Of course, this can be a very complex process for both airlines to undertake.
TAKE OVER / BUY OUT / ACQUISITIONS
In a takeover, a company is purchased by another company. The purchasing company owns all of the target company’s assets including company aircraft, trademarks, routes and so forth. The original company may be entirely swallowed up, or may operate semi-independently under the umbrella of the acquiring company.
In the case of Southwest buying out AirTran, the AirTran brand will disappear and be absorbed by Southwest. It is not a merger and Southwest will own the assets of AirTran and have complete control. This process is easier than a merger, since management at Southwest has the final say, but they need to successfully share their culture with the employees at AirTran and make sure they feel welcome.
Alright, I hope that helps some!