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American Airlines, U.S. Airways To Announce Merger

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(credit: CBS) Holly Wagner
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MINNEAPOLIS (WCCO) — Two of the country’s biggest air carriers are tying the knot on Valentine’s Day. CBS has learned American Airlines and U.S. Airways will announce they are merging later this morning.

But what does the plan mean for you and your travel plans? This deal has been in the works for months, but officials from the two airlines agreed to the plan late Wednesday night.

Under the deal, the combined airline would keep the “American” name, making it the largest air carrier the world. While it’s good for the two airline companies which have had financial problems, it may not be great news for travelers in terms of ticket prices.

The airlines say this consolidation will cut costs and expand service, but many analysts think otherwise. Rick Seaney, CEO of the travel website farecompare.com, believes travelers will see higher fares because of less competition.

In 2008, when then-Minnesota based Northwest Airlines was taken over by Delta Airlines ticket prices went up more than 20 percent. They went up even higher, more than 30 percent, after the United Airlines-Continental Airlines deal.

There is one bonus for consumers: The merge between the two airlines’ frequent flier programs. Analysts say joining them will create more route combinations, so it should be easier to book perk travel trips on the days you want.

Since American Airlines is in bankruptcy, a federal judge will have to decide if this is a good deal for creditors. The U.S. Department of Justice will also have to sign off on it.

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