American Airlines-US Airways Is Still a Work in Progress

(The Philadelphia Inquirer/TNS) -

American Airlines Chief Executive Doug Parker says “significant progress” has been made since US Airways and American merged to create the world’s largest airline one year ago Tuesday.

Ticket counters, operations and airport lounges have been combined in more than 80 airports. Dozens of aircraft have been painted in the new American colors.

Passengers can access both airline networks through “codeshare” ticketing. Frequent fliers can earn and redeem travel miles on US Airways and American flights.

But the hardest part of merging a combined company of 100,000 employees and 6,700 daily flights lies ahead, in 2015.

American and US Airways must still combine reservations into a single system. Management has not achieved joint contracts with separate American and US Airways labor groups, including pilots and flight attendants.

American announced a plan Monday to spend $2 billion on passenger amenities including new lie-flat business seats, in-flight entertainment, and onboard power outlets and wi-fi on certain larger aircraft.

The upgrades aim to lure customers and be “better than our competitors” with “refreshed cabins and clubs, modernized ticket counters, improved technology and new aircraft,” says Parker.

By the end of December, American will take delivery of 100 new aircraft. It will receive 112 more planes next year, and 84 in 2016. Among the new aircraft will be 42 Boeing 787 Dreamliners, capable of long-haul flights to Asia.

American has produced strong profits — nearly $2.3 billion in the first nine months this year, and in July announced its first dividend in 34 years to give cash back to shareholders and a $1 billion stock-buyback plan.

In 2015, the airline will seek a single operating certificate from the Federal Aviation Administration (FAA). Exactly when the US Airways brand and airplanes will disappear is unknown.

The move to a single frequent-flier program will happen between April and June. The Dividend Miles program will eventually disappear, and US Airways customers will go into the AAdvantage program.

In September, the flight attendants’ union for American and US Airways announced a tentative joint labor contract. But on Nov. 9, members voted it down by 16 votes out of 16,000 cast. The dispute has been submitted to binding arbitration.

Meanwhile, on Nov. 12 the union for American and US Airways pilots blasted management’s contract offer, which proposed matching the pay rate to what Delta pilots earn, but without the 15 percent annual profit-sharing that Delta pilots receive. If the union and the Fort Worth, Texas-based company cannot agree, the matter will go to binding arbitration.

Based on American’s record profits, employees have been pressing for profit sharing.