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Potential American-US airline merger could increase costs - abc27 WHTM

Potential American-US airline merger could increase costs

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MIDDLETOWN, Pa. (WHTM) -

A merger is taking off between American Airlines and US Airways. The deal would elevate the airline to the largest in the world, but local fliers could see airfare go sky high.

At Harrisburg International Airport, it's easy to spot frequent flyer Curtis Henderson. He's wearing slip-on shoes, minimal jewelry and toting a compact rollaway luggage. After a business trip to the midstate, Henderson was on his way back to Atlanta.

This veteran air traveler is skeptical that a merger between two of the country's larges airlines won't be a good thing.

"Not for the flyers," he said. "Only if [American Airlines] can ensure a reduction in airfare and restrictions."

According to several reports, the details of the deals are like their planes: in the clouds. The Wall Street Journal reported the deal would capitalize on upwards of $10 billion. The move would also help American Airlines climb out of Chapter 11 bankruptcy.

But what about airfares? An analyst with Forbes explained the merger could increase fares due to less competition. If the American-US merger happens, they, along with Southwest Airlines, United Continental and Delta Air Lines, would be our nation's airlines.

HIA spokesman Scott Miller explained that, if that were the case, an increase would not come right away. With past mergers, it's typically taken two or three years until fliers feel an impact.  

"They have to merge with the FAA, certificates and things, the unions have to agree. It's a very long process," said Miller.
 
Miller explained that every merger is different. In 2008 Delta and Northwest married. Two years later, United and Continental tied the knot. In 2011, Southwest bought out AirTran. Miller said only recently has HIA seen the impact from the 2010 United-Continental merger.

"[There are] four cities now with four hubs, instead of two cities with two each. So, you start to see schedule tweaks and things like that … [T]here's more flying to Detroit than we had prior to the merger, but there's less to Cincinnati."

Analysts believe the American-US deal would improve domestic routes and expand international locations. Currently, the two airlines have few routes that overlap which would make delays and re-scheduled flights a lot easier.

So while headache pain may be relieved, the wallet still could take the brunt. According to the U.S. Bureau of Transportation, the average domestic airfare is $357, the highest since 1995.

"More money for the business, more money for the customer and that means less money coming home for someone else's salary," said Henderson.

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