US Airways-American Airlines to merge

The new airline, which will use the American Airlines name, will beef up American’s network, particularly along the East Coast, where US Airways is a major player with its Washington-New York Shuttle and hubs in Philadelphia and Charlotte. The proposed merger of US Air and American parent AMR, which filed for bankruptcy in November 2011, is the latest in a series of moves that have combined what were 10 major airlines in 2001 into four mega-carriers.

The combined US Airways-American joins United Continental, Delta Air Lines and Southwest Airlines as the industry’s dominant players in the United States. Together, they accounted for 83% of U.S. airline passengers last year. The consolidation has meant fewer choices for the nation’s fliers, who have only one non-stop choice available to them on about a third of the nation’s major routes.

But even as competition has dwindled, fare increases have remained in check, inching up less than 2% a year in the last decade. And most experts don’t expect this deal to trigger a surge in ticket prices. There are only 13 routes served on a non-stop basis by both American and US Airways, according to JPMorgan Chase analyst Jamie Baker, and eight of those routes will be served by the one airline after the deal.

However, passengers will probably experience a lot more travel disruptions — from lost luggage to flight delays — as the two airlines combine systems, which is typically the case when airlines merge. The deal still needs the approval of the bankruptcy court and federal regulators, a process that will take months to complete. (CNN.com)