The merger that creates the world’s largest airline will, for now, mainly be a stock deal. Shares of US Airways have gone away, replaced by American Airlines stock. American had been in Chapter 11 bankruptcy proceedings.
Government regulators cleared the deal for the airline, which has a major hub in Philadelphia.
The combined company will be headquartered in Dallas-Fort Worth while maintaining a corporate and hub presence in Phoenix. Other hubs, such as Philadelphia will remain, with planes flying under US Airways colors.
The airlines will remain separate for some time, due to the complexities of merging two different systems and operating styles.
The first signs of a merger, according to airline officials, will be the ability of users of frequent flier miles of both airlines to use flights of the combined carrier.
Long term, the merger is expected to reduce service to smaller airports, such as Salisbury, Md. and raise fares, according to aviation experts. The airline claims the benefits of the combined system will outweigh any cuts and agreed to keep much of its schedule for three years.
The merger may have played a role in the decision by Frontier Airlines to add Trenton and New Castle to its system. A merged American-US Airways may be less included to engage in what the industry calls “predatory competition” by slashing fares and driving a competitor out of a market. Frontier also offers only a few flights a week to destinations, rather than daily schedules that would be easier to attack by US Airways.
Pressure from US Airways led Southwest to end service to Pittsburgh and points in New England from Philadelphia. Discounter Jet Blue partially replaced Southwest’s service with flights to Boston.
Flights to Pittsburgh soared as high as $1,000 when Southwest departed that market from Philadelphia.