Budget

What Recent Airline Merger Means to Your Travel Budget

February 21, 2013 by

Couple at airport

While the merger between American Airlines and US Airways has been talked about for what seems eons, it is now a done deal and we have another mega-carrier.

Bigger is not always better, and least not for everyone. It’s better for the airlines, but for the traveler, we can expect to see the fares increase while the number of routes decrease.

For the present, fliers don’t have to worry about ticket prices going up. That will take place as the reality of the merger takes place and the two companies become one in function. 

American Airlines

Expect Airfare to Go Up

Experts suggest that once the mega-carrier cuts and combines routes, fliers can expect to see prices go up. Flights most likely to be affected will be non-stop routes that both American and US Airways flew.

For example, now instead of two options to fly from Charlotte, N.C. to Miami non-stop with two different carriers, options will be condensed or limited to one. Yet the same number of fliers will want to buy seats on that plane. With more demand and less supply, ticket prices will increase. 

Members of the frequent flier programs of American and US Airlines can expect a similar problem. The merger will create a glut of “elite-status” members competing for upgrades and other perks, but with less flights. So for the first year or so, many of the elites won’t be feeling quite as elite as they use to. 

Expect to pay more to fly.

Expect to pay more to fly.

What Fliers Can Expect in the Future

In the past, cheaper airline tickets were the result of different airlines competing to get business. As airline mergers take place, competition happens less and less and, for the most part, eliminates incentives to cut fares to attract customers. 

However, the news of the merger is not all gloom and doom. Experts suggest the new mega-carrier will be more competitive on a global scale, and in the long run more profitable. 

Photo credits: Holidayextras, Ambernectar 13, Simon_sees



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