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TMCNet:  Tucson likely to keep current flights after US Airways-American merger

[February 15, 2013]

Tucson likely to keep current flights after US Airways-American merger

Feb 15, 2013 (The Arizona Daily Star - McClatchy-Tribune Information Services via COMTEX) -- Though uncertainties remain, the planned merger of American Airlines and Tempe-based US Airways isn't expected to immediately affect air service at Tucson International Airport.


US Airways and American say that after their planned merger, the combined airline "expects to maintain all hubs and service to all destinations." And while that doesn't necessarily mean the merged airline won't cut the number of flights to certain destinations, the two airlines don't currently fly the same routes from Tucson.

US Airways operates 10 daily nonstop flights from Tucson, all to Phoenix Sky Harbor Airport. American offers two daily nonstops to Chicago O'Hare, seven to its hub at Dallas-Fort Worth and four to Los Angeles, according to TIA.

That lack of overlap also is reflected nationally, and in particular, regionally, said Robert Mittelstaedt, professor and dean of the W.P. Carey School of Business at Arizona State University.

"This merger is a little unusual in the history of these mergers, in that American and US Airways don't overlap on a lot of routes," said Mittelstaedt, a longtime commercial-rated pilot and frequent flier who has followed the industry for years.

The $11 billion merger, announced Thursday, will turn American into the world's biggest airline, with 6,700 daily flights and annual revenue of roughly $40 billion. The combined carrier will be called American Airlines and will be based in Fort Worth. The deal is expected to close by the end of September, as part of American's emergence from Chapter 11 protection.

Amy Moreno, travel director for AAA Arizona, said though the merger is good in that it preserves American, the further industry consolidation could have some detrimental effects on consumers.

The merger will leave four big carriers in control of 90 percent or more of domestic traffic, she said.

"Less competition could lead to higher fares, and we don't know which routes are going to be impacted, if any," said Moreno, adding that consumers are likely to see any changes unveiled over the coming months, rather than immediately.

Smaller-market airports like TIA may come out relatively unscathed if existing flights are well-supported, she said.

"I would say the areas that have consistent flights out of smaller airports that are successful now are most likely to stay in place. The ones where there's overlap in larger cities, like Phoenix, are probably the ones they would be looking at modifying," Moreno said.

Because of the uncertainty surrounding policy changes after the merger, Moreno recommends that people consider cashing in their current frequent-flier miles.

American has a relatively small presence at Sky Harbor, a major US Airways hub, so flight changes there may be minimal, ASU's Mittelstaedt noted.

In Phoenix, 300 US Airways flights a day use 50 gates at the airport's largest terminal. American has a tiny presence by comparison, with just 20 departures a day using three gates in the smaller Terminal 3. Those operations will most likely move to the US Airways area of Terminal 4 when the merger is complete, airport spokeswoman Deborah Ostreicher said.

"Phoenix will be the primary Western intercity hub, Los Angeles the primary international hub," Doug Parker, who will be the combined airlines' CEO, said Thursday. He said he expects the Phoenix hub presence to be stable or even grow as the airlines consolidate.

That sounds plausible to ASU's Mittelstaedt, who said he doubts the combined airline would move an entrenched hub like Phoenix to a place like Los Angeles International Airport -- site of American's only hub in the West -- noting that many frequent fliers to Southern California prefer flying directly to their destinations rather than fighting traffic to fly out of LAX.

US Airways has about 9,000 employees in Arizona, most at Sky Harbor. Between 600 to 750 work at the company's headquarters in nearby Tempe, and some of those are expected to go to Texas once the merger is complete, with Parker leading the way.

But John McDonald, the company's vice president for corporate communications, said US Airways just signed a new five-year lease with a five-year option on its headquarters building and expects to keep hundreds of people working there.

Any job losses due to the merger are expected to be mainly in management, Parker said.

The merger doesn't stand to have much effect on Tucson-area employment. Last year, American closed a customer-service call center in Tucson that employed more than 700 workers.

This report includes information from The Associated Press.

___ (c)2013 The Arizona Daily Star (Tucson, Ariz.) Visit The Arizona Daily Star (Tucson, Ariz.) at www.azstarnet.com Distributed by MCT Information Services

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