What the US/AA DOJ Settlement Means to Me (and other miles focused junkies)

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I’m nowhere near educated enough in the inner workings of mergers to try to pretend I know much more than what the headlines tell you related to American Airlines and US Airways reaching an agreement with the Department of Justice, thus making it more likely that the merger will happen.  According to this article, as a result of the agreement, American and US Airways will sell to low-cost carriers 104 slots at Washington’s Reagan National, 34 slots at New York’s LaGuardia, and rights to gates at Boston’s Logan, Chicago’s O’Hare, Dallas’ Love Field, Los Angeles and Miami airports.  In theory, this well help with competition, and prevent the combined airline from having too much influence on pricing in/out of a given airport by having control of too many slots.  Or something like that.

The “New American” also agreed to maintain its hubs in Charlotte, New York (Kennedy), Los Angeles, Miami, Chicago (O’Hare), Philadelphia, and Phoenix consistent with historical operations for a period of three years.  This means that there will be some pretty solid new British Airways Avios redemptions once some of these short, but expensive routes are in OneWorld!

American’s website also says, “Completion of the merger remains subject to the approval of the settlements by the U.S. Bankruptcy Court, and certain other conditions. The companies now expect to complete the merger in December 2013. they expect the merger to close in December.  They plan to move quickly, so don’t be surprise to see US Airways exit Star Alliance in early 2014, as well as see AAdvantage and Dividend play nicely with each other (moving miles, elite benefits, etc) before too long.  I would read this post by View From the Wing for some educated guesses on what happens next.

Here’s what I do know something about.  I know that with this merger appearing back on track, I am more concerned with racking up miles from their respective co-branded credit cards and making the most of their current award charts relatively quickly than I am talking about or hearing about pages of insider analysis about the inner workings of the merger or mountains of legal mumbo jumbo.  Though I know that is all extremely interesting to some. 

Short story is, currently both American Airlines and US Airways have their own respective personal and business credit cards.  Odds are if the merger proceeds that at some point the cards will cease to be issued in their current form – or at least odds are that the Barclays US Airways cards certainly will.  I know that with the Continental and United merger, eventually all the old cards ceased to be issued, and many (including myself) were successful in getting the new United MileagePlus Explorer card when it launched, including the sign-up bonus as it was a new product.

I had gotten lazy and/or optimistic that the merger wouldn’t happen and haven’t been working on getting the current cards like I should.  I have now added that back to the top of my to-do list, and recommend that you consider doing the same.  I don’t think these cards are going anywhere overnight, but the next time the stars align for you to get a rewards credit card, I would consider one (or two) of these.  I also would start thinking about cashing in on the current award charts of both airlines, in the event there is a specific redemption you have in mind.  My gut smells a devaluation for both when the time comes to combine award programs, so get ahead of that by brainstorming some redemptions right now.

In case you also want to move these credit card applications up in your list of priorities, here are some of the best options I know of (none of which are affiliate offers):

US Airways Personal MasterCard: 35,000 US Airways Dividend Miles after first purchase (application link found here – watch out for those who promote only the inferior offer with 30k sign-up bonus miles)

US Airways Business MasterCard: 25,000 US Airways Dividend Miles on first purchase, $79 annual fee

Citi AAdvantage Visa Signature/Citi Platinum Select Card: 50,000 bonus miles after spending $3,000 in three months

There are many different types of Citi AAdvantage business and personal cards available – head here for full details.

Don’t get me wrong, I’m sure there will be some good things to come out of the merger for consumers, but there will pretty much certainly be fewer rewards card opportunities and award chart sweet spots.  So, don’t wait longer than you need to to take advantage of some of the opportunities around today.

What is your plan now that the merger is back on track?

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  1. As an American airlines platinum member, I’m excited to have them at the Philly hub (my home). I don’t know why I never got into US Airways, maybe I should so I can leverage both programs for next year.

  2. I was hoping the merger wouldn’t go through…mainly because I don’t like change. It’s rarely good. But having said that, I am looking forward to my miles combining. I seem to remember when CO and UA merged they offered some sort of bonus for voluntarily combining your accounts in advance. I think? (I’m old ..memory not so good)

    I got the US Airways master card earlier this year and got the AA one a few months ago. I look forward to a “NEW” card that I can get soon to earn even more miles.

    On the downside, I am worried about certain award features disappearing. Like off-peak awards and one way awards that AA offers. I have used both of those several times. And of course I worry about total devaluation of the new combined program. Oh well…I guess all we can do is wait and see how it all shakes out.

  3. Nathan, glad this will work out well for you – at least for three years. 😉
    Laura, I don’t remember a bonus for linking accounts other than you could move miles and take advantage of either program.
    Rachel, whoops – fixed now. Thanks!

  4. I don’t see how giving up 2 gates at ORD DAL LAX BOS and MIA will do anything at all it’s just two gates maybe at DAL it could help SWA after this year but still its just two gates DOJ fail now on the DCA and LGA slot divestures I do see how this can help keep thing level it just depends who’s going to take the slots. Does DL take the LGA slots and does SWA or B6 take the slots up in DCA

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