American Airlines and US Airways Merging

A blog about business and economics.
Feb. 7 2013 9:15 AM

American Airlines and US Airways Merging

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CHARLOTTE, NC - SEPTEMBER 01: U.S. Airways planes sit on the tarmac at Charlotte/Douglas International Airport on September 1, 2012 in Charlotte, North Carolina.

Photo by Kevork Djansezian/Getty Images

As of last night it looks like American Airlines is finally going to do the right thing and accept US Airways' efforts to take it over. That's the best outcome for American financially; it's the most plausible outcome in terms of regulatory scrutiny; and it's the outcome American's unions have been pushing for.

It'll be interesting to see what happens to the US Airways brand here. US Airways itself is the result of a takeover of the larger-but-financially-troubled US Airways by America West, but when the takeover was executed America West very much adopted US Airways' branding. A similar dynamic seems plausible here, where in a corporate sense the new airline will be US Airways, but in a branding sense it'll be American Airlines (the takeover of AT&T by SBC, at which point it all became AT&T, is probably the most prominent instance of this). Except in the aviation industry these branding considerations aren't just superficial. US Airways is part of the Star Alliance, and has codesharing deals with United, Lufthansa, and other partners. American is in the OneWorld alliance, with codesharing deals with British Airways and Japan Airlines. So the whole US Airways route map will need to be rethought, particularly in terms of international service (right now US Airways flies direct from Philadelphia to Zurich but not to Helsinki, for example, which would likely be reversed as a OneWorld airline*) along with all the many operational difficulties that exist in an airline merger.

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* Correction, Feb. 7, 2013: An earlier version of this post wrongly stated that US Airways has no direct flights from Philadelphia to London.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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