After months of courtship, the engagement between US Airways and bankrupt American Airlines is now official.
The two carriers announced last week that they’ve reached a deal to combine their operations. If the bankruptcy judge and federal antitrust regulators agree, the merger could take effect as early as September.
In South Florida, where American is a major employer, many are relieved that the airline seems to have a strong future.
But there’s understandable concern about any negative impact of a potential merger. There are questions about whether the new airline — to our region’s benefit, it will retain the American Airlines name — will cut jobs, routes or increase fares on a public already reeling from the Great Recession.
American and US Airways officials have been working hard to answer those questions and others that will inevitably come up over the next several months as the union morphs into a marriage.
A major concern is jobs. The last thing anyone wants to see is more job losses into a recovering, but still sluggish, economy. Early indications are that job losses will be at a minimum. And that’s good news for South Florida, where American has about 9,000 employees.
Last year, the carrier notified 1,400 employees that they could be laid off. The actual number of layoffs was far fewer. In July, American announced layoffs of 63 people at Miami International Airport.
So rank-and-file employees, by and large, are unlikely to be adversely affected by this merger. In fact, many would be surprised if there weren’t some job growth in South Florida.
American had planned for 20 percent growth over five years at its largest hubs, including MIA, where it controls about 75 percent of the traffic. Much of that growth revolves around the airline’s Latin American operation.
Even in bankruptcy, American has been increasing flights to Latin America, including a new route to Manaus, Brazil. That announcement came before news of the merger. The new American should not roll back those plans. Indeed, the Latin American market continues to pose a huge growth opportunity — one that should be seized.
The merger “should be positive for the employees and it should be positive for the communities that the airlines serve,” Michal Boyd, an aviation consultant, told The Miami Herald.
Still, not everyone will likely be spared job cuts. The new airline will be merging its corporate staffs in Fort Worth, Texas and there are reports that consolidation will lead to some corporate staff attrition.
Aside from job cuts, a big worry for many people after mega airline mergers is increased airfares. Good news: American and U.S. Airways do not overlap in many cities, which can force a spike in fares after a carrier exits the market. Competition among the new American and other mega carriers — Delta, United and low-fare Southwest — hopefully will keep a lid on major fare increases.
With the engagement formalized, the hard work now begins to integrate the operations of both airlines. Federal regulators should give this proposed merger careful consideration. But in the end, approving it is in the best interests of the airline industry, the flying public and South Florida.
The merger ensures a strong American Airlines that will continue to play a major role in transforming South Florida’s economy for years to come.