What would be the network implications of an American Airlines and US Airways merger?

American Airlines (AA) and US Airways (US) merger?

Recent moves by various interested parties to lay the groundwork for a possible merger between American Airlines (AA) and US Airways (US) would obviously have many financial, organisational, operational, and staffing implications. However, anna.aero is more interested in the network implications of a combined airline. A look at the leading airlines at all North American airports (in terms of weekly departing seat capacity) reveals that American Airlines ranks fourth, just ahead of US Airways. Combing the networks of these two carriers would make ‘American Airways’ the leading airline across North America, leaving the US market with three mega-major legacy carriers (American, Delta and United) and one mega-LCC; Southwest.

Top 12 airlines at North American Airports Weekly departing seat capacity (millions)

Source: OAG Max Online for w/c 2 April 2012

Southwest (which would then be ranked fourth) would then be five times bigger (in terms of weekly seats from North American airports) than the next biggest US carrier, JetBlue.

Six major hubs, but only Phoenix in the west

Looking at the top 12 airports (by current weekly seat capacity) shows that the merged airline’s centre of network gravity would be very much more towards the east coast than the west. Of the top 12 busiest airports for the combined carrier, only two (Phoenix and Los Angeles) are located in the western half of the US.

"American Airways" top 12 airports Weekly departing seats

Source: OAG Max Online for w/c 2 April 2012

Would create six monopoly routes with at least 10 flights per day

Analysis of current schedule data reveals that there are nine US domestic airport-pairs where American Airlines and US Airways currently both operate at least four daily flights. The following table summarises the routes (ranked by total weekly departures from the two airlines combined) and which other carriers operate the same routes.

Route AA WF US WF Other carriers (WF)
Charlotte (CLT) – New York LaGuardia (LGA) 32 75 -
Washington Reagan (DCA) – Raleigh-Durham (RDU) 48 52 -
Dallas/Fort Worth (DFW) – Phoenix (PHX) 60 35 -
Charlotte (CLT) – Chicago O’Hare (ORD) 38 56 United (29)
Philadelphia (PHL) – Chicago O’Hare (ORD) 46 47 United (43)
Dallas/Fort Worth (DFW) – Charlotte (CLT) 37 54 -
Charlotte (CLT) – Miami (MIA) 35 49 -
Dallas/Fort Worth (DFW) – Philadelphia (PHL) 40 33 -
Phoenix (PHX) – Chicago O’Hare (ORD) 28 35 United (21)
Source: OAG Max Online for w/c 2 April 2012
WF: Weekly Frequency

Only the three routes involving Chicago O’Hare feature a third carrier (United all three cases). A merger between American and US Airways would thus result in six monopoly routes, currently served with between 10 and 15 flights per day.

19 European destinations served; 17 by US Airways, 12 by American

Given that Delta is a member of SkyTeam, and that the ‘new’ United (which merged with Continental) is firmly established within the Star Alliance, it would appear to make sense for a ‘new’ American to remain in oneworld, even though US Airways is currently a Star Alliance member. This would likely have an impact on the shape of the transatlantic network, the current state of which is summarised below.

BOS CLT DFW JFK LAX MIA ORD PHL RDU
Amsterdam 7
Athens 7
Barcelona 7 7 7
Brussels 7 7
Paris CDG 7 7 7 14 7 7 7
Dublin 7 7 7
Rome Fiumicino 7 7 7 7
Frankfurt 14 7 14
Glasgow 7
Helsinki 7
London Gatwick 7
London Heathrow 21 27 35 7 7 28 7 7
Lisbon 7
Madrid 7 7 7 7 7
Manchester 7 7 7
Munich 7
Milan Malpensa 7
Venice 7
Zurich 7 7
Source: OAG Max Online for w/c 6 August 2012
CLT and PHL routes are operated by US Airways, all others by American Airlines.

Charlotte and Philadelphia services to Frankfurt, Munich (both Lufthansa hubs), Lisbon (TAP Portugal hub), Brussels (Brussels Airlines hub) and Zurich (Swiss hub) would likely be reconsidered due to Star Alliance feed being lost at the European end of the routes.


Comments

  1. steve says:

    This proposed merger is usairways last attempt to grow in size as it is the smallest legacy carrier and with the growth of delta and united in the last few years,it would make it very hard for airways to exist in the future.They have hubs in 2nd tier cities,a lack of service in the mid-west,a very small wide body fleet,and no service to asia.
    Airways still has not combined labor groups from the 2005 usairways-america west merger and trying to make peace with americans labor force is too large of a task to carry out and run an enlarged airline.
    American has the hubs,fleet,and routes to emerge as a stand alone carrier and be large enough to have a major presence worldwide. Being part of the one world alliance gives it added world brand recognition.

  2. Jack says:

    So, it sounds like Steve works for AA. And is not a Union Member? Not that some of his points are not valid, however it is a very narrow minded view. Who is to say that a merger would not swallow up US AIR and simply emerge a leaner stronger AA brand? It is not impossible that AA could retain its ONE World status as well. It is very obvious that benefits exist for both parties to become more of a dominant force in the NE Markets, and then pick up a greater expansion opportunity in the West Coast. The SHAREHOLDERS for both airlines are driving this train, nobody else. There is cash to be made, after years of AA losses. They will move towards the stacks of mad money.

  3. Patrick says:

    In terms of European services, one could indeed imagine some of BRU/FRA/ZRH being dropped by an “American Airways”. Munich is an Air Berlin hub so might remain; Berlin could conceivably start; and given the noises Mr Walsh is making about IAG running the rule over TAP, I wouldn’t cancel the PHL-LIS service just yet…

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