How would a US Airways / American Airlines merger impact Barbados?

by Adrian Loveridge, small hotel owner

While far from being a done deal, our tourism planners must be already galvanised into exploring further opportunities that potentially a merged American Airlines and US Airways could present for Barbados.

Apart from the existing hubs of New York, Miami and to a lesser extent, Charlotte, a combined carrier would have a considerable presence in Chicago (1), Los Angeles (6), Phoenix (23) and Philadelphia (43). World ranking in terms of passengers handled are shown in brackets and collectively amount to over 202 million annually.

Having lost direct airlift out of Atlanta, Philadelphia and more recently, Dallas/Forth Worth, I would guess that there will be some reluctance to jump into another gateway. But with proper planning, implementation and consistent marketing support, the temptation may prove too overwhelming due to the numbers and reach involved.

The merged airline (AA/US) would leapfog the carrier into first position, both in terms of the domestic market and international enplanned passengers to/from the United States. US Airways passengers would  gain access to American Airlines international destinations and AA would be better able to connect to smaller U.S cities US Airways serve.

Between June 2011 and May 2012 American Airlines domestic share was 13.1 per cent and US Airways 8 per cent*. This compares with Delta 16.2 per cent and Southwest 15.3 per cent. Internationally to/from the US, American carried nearly 21 million and US Airways almost 7 million people last year*.

Together they would create an airline about the same size as the world’s largest, United Continental Holdings. And if terms can be agreed and permission gained from the regulatory authorities, it will also become the dominent US carrier.

Should that concern us?

Surprisingly, according to Atmosphere Research Group, an independent advisory firm, the routes of US Airways and American have very little overlap. Of the 508 nonstop city pairs (flights from one city to another without a stop) that American operated on a peak day in July (384 for US Airways), only 12 were identical with US Airways. Thats little more than two per cent overlap, or virually insignificant.

Will a US Airways – American Airlines merger stifle competition or drive up ticket prices?

The jury is still out on this one, but while JetBlue and Southwest, who between them carried more than 161 million passengers last year are still around,  that’s probably unlikely. Domestically, add Republic/Frontier, Spirit and Allegiant and thats another 60 million, so there is still lots of choice.

Prior to declaring Chapter 11 protected bankruptcy, American had placed the largest ever order for new aircraft in aviation history, dividing the supply between the two biggest manufacturers, Boeing and Airbus. Currently according to Airfleet.net, the current average of AA’ s fleet (607) is 15 years old and US Airways (335) is 12.8 years. But nearly half of American’s entire fleet consists of 20 plus year old B767’s and variants of the kerosene guzzling MD80/90’s.

Successful implementation of debt and salary restructuring, together with the introduction of a newer and more fuel efficient fleet is therefore absolutely critical to the airlines long term survival and viability.   And this same criteria applies whether or not the merger becomes a reality.

Source* – Bureau of Transportation Services.

5 Comments

Filed under Aviation, Barbados, Barbados Tourism

5 responses to “How would a US Airways / American Airlines merger impact Barbados?

  1. The Same the World Over

    Is this a hypothetical article or are there indeed plans for their merger?

  2. NYC/BGI

    Talking about additional lift, what about a recalculation of the hotel rates. remember the Lets get carried away with Rockley and American Steve Hicks.was a bonanza for BGI, it brought loads of tourist and occupancy was high. Ask Ralph and Monte. Now you have to complete against the cruise lines who offer 6 meals a day and midnight snack shack and look at full breakfast buffet in BGI when they rashion the food with the exception of Sandy Lane. hotels need a new playbook to bring tourist to BGI and enjoy a high occupancy. Remember when all villas were taken in August for the holiday period. BGI was hot and a place to go now what its an afterthought why because the BTA and hotels are still using a 2000 playbook,.

  3. 53

    FYI: American Airlines is accuring new fuel efficent fleet of Boeing and some airbuses. The old MD-80s are being set to the barn yard. The B-767 series aircraft are fairly new by aviation standards.

  4. Adrian Loveridge

    Anonymous,

    The AVERAGE age of American Airlines B767 fleet is 19.8 years.
    Please see Airfleets.net

  5. Paul

    ?Does anyone know if US Air plans to continue flights from Charlotte to Barbados this fall 2013? I can NOT find an flights from Cahrlotte to BGI on US Airs website.