American Airlines CEO: "Nothing about this merger should affect prices"

American is largest airline in the world. Its merger with US Airways became official on Monday. The combined carrier flies 1,500 planes and employs more than 100,000 people.

Recently, the company's new leader, Doug Parker, shared a look at the future with CBS News, and discussed what the merger means for passengers.

For Parker, American's new chief executive officer, Monday's announcement has been two years in the making. Parker said, "We take two airlines -- and put them together -- with networks that are highly complementary. Of the 900 routes that are flown between American and US Airways, only 12 of them there's any overlap. It provides the ability for us to take customers to places that neither airline can today by connecting those two networks."

The merger, which won't be fully complete until 2015, will create the world's largest carrier, leaving American and three others -- United, Delta, and Southwest in control of more than 80 percent of the U.S. market.

CBS News' Manuel Bojorquez remarked to Parker, "When you take two and combine it into one, some see one less competitor out there and that their airfare might go up."

Parker replied: "In this case, we're putting together two airlines that are highly complementary and not reducing the supply of seats. So nothing about this merger should affect prices." 

But according to a June 2013 government accountability report, airline studies have shown "...increased fare premiums..." following mergers.

Other challenges include integrating the companies' networks and reservation systems, and managing pilots and flight attendants from different unions.

The merger, according to Laura Glading, president of the Association of Professional Flight Attendants, is a good thing for flight attendants because it means job security.

"It's going to offer many more options in their career," Glading said. "They're go to work for a very competitive company. We want the new American to succeed as much as anyone." 

Parker says the deal should not negatively affect the passenger experience.

"Early in January...our frequent flyers will see the ability to earn and burn miles on either airline into one program," Parker said. "You'll be able to see things like being able to get your upgrades on either carrier.  You'll shortly thereafter be able to see the ability to -- through code sharing -- fly on either network seamlessly." 

Watch Manuel Bojorquez's full report above.

Comments

Follow Us

The Newsroom