USAir, American and other Airline Mergers

American Airlines CEO Tom Horton (left) and US Airways CEO Doug Parker

The announcement that US Airways and American have agreed to merge means they will become the largest U.S. domestic airline, with 19.0% of total passengers. Through a series of bankruptcies empowering airline management to soften employee unions, there has been a clear concentration to just a few airlines. Many fear this change will reduce services and increase fares charged to passengers.

The major domestic U.S. airlines now include:

  • American Airlines: with 19.0% of total passengers, after the recent US Airways merger. Earlier mergers included AmericaWest (’05), TWA (’01), Piedmont (’89), Pacific Southwest (’88), AirCal (’87), and Ozark (’86)
  • Southwest Airlines: with 18.2% of total passengers, after the recent AirTran merger. Earlier mergers included Valujet (’97, via AirTran), Morris (’85) and Muse (’83).
  • Delta Airlines: with 15.9% of total passengers, after the recent Northwest merger. Earlier mergers included: Western (’87), Republic (’86), Hughes AirWest (’80), North Central (’79), and Southern(’79). The FAA operating certificates merged 12/31/09.
  • United Airlines: with 12.6% of total passengers, after the recent Continental merger. Earlier mergers included: People Express (’87), New York Air (’87), Frontier (’87), Eastern (’86),  and Texas International (’82). The FAA operating certificates merged 11/30/11.
  • JetBlue Airlines: with 3.9% of total passengers. No mergers.
  • Alaska Airlines: with 2.5% of total passengers. Acquired Jet America (’87); acquired Horizon (’86).

the abandoned terminals, and the fate of CVG (click on image to view original blog post and photo essay)

One consequence of this series of  mergers has been the drastic downsizing of former airline hubs at Cincinnati,  Pittsburgh and St. Louis. Large communities are experiencing severe economic impacts as FAA and airline corporate decisions put them through boom-bust cycles. The phenomenon seems oddly similar to the impact professional sports franchises have when they threaten to relocate to a different city if they cannot have sweet tax subsidies.

A few links…





August 2012