American Airlines – US Airways merger draws near-179

Prospects for British Airways looking rosy

American Airlines

With the long-awaited merger between American Airlines & US Airways set to be agreed as soon as 14th February, , the US aviation market will come down to 3 mega legacy carriers (the other 2 being United & Delta) plus a number of low cost carriers and small independents such as Virgin America.

The new merged carrier is expected to simply be called ‘American’ and have its HQ in Austin, Texas. It will be the largest airline in the world with almost $40 billion in revenues, some 100,000 employees and over 1,500 aircraft.

Assuming the merger succeeds, it is widely expected that the new carrier will be part of the oneworld alliance, a massive boost to British Airways and its partners.

The North Atlantic has always been British Airways most important market and the prospect of losing its long-standing partner, American Airlines, must have filled the airline’s top management with dread. Now, not only does it look as if they kept American Airlines in the fold, they are also set to gain a new partner, US Airways, with a strong route network on the east coast.

Unlike both British Airways & American Airlines, US Airways has a very weak presence across the Atlantic with just the single flight between Heathrow & Philadelphia although, starting this March, it will be adding a new direct service between Heathrow & Charlotte (ironic because it was only able to do so after British Airways & American Airlines were forced to relinquish some of their slots). The benefit to British Airways therefore will almost entirely accrue from increased feeder traffic from US Airways domestic network.

This latest development will cap a successful 12 months for oneworld and British Airways. At the start of February, Malaysia Airlines joined oneworld, giving the alliance an important foot-hold in the South East Asian market. Then, at the end of 2012, Qatar Airways announced that it too would be joining oneworld, the first of the Gulf carriers to join any of the airline alliances.

Leaving aside the troubles at British Airways IAG partner, Iberia, prospects for the British flag carrier are certainly on the up.

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