Today, news sources across the country are asking the following question: Should American Airlines merge with US Airways? If you follow this blog, you know that for the past couple of months, US Airways has been aggressively pursuing the potential merger. However, a source says that American Airlines is actually considering the union with one of their biggest competitors. Texas residents may be interested to hear about the debate surrounding the topic.
American Airlines wanted to emerge from bankruptcy proceedings, which it began in November, before considering a marriage with another company. However, the company has been under pressure from unions and creditors to team up with US Airways. If this happened, the combination would create the country's largest airline.
So, should the union occur? The opinions are varied. Some people believe that the only way that the airlines will survive will be through a merger. As you know, the airline industry has moved toward a more consolidated model. This technique allows the companies to keep costs down while increasing profits.
However, others feel that American Airlines can remain independent as it has demonstrated signs of recovery over the past few months. In fact, some say that the company, in comparison to other airlines, has greater revenue per mile flown.
Sources also indicate that the marriage would hurt travelers. When these airlines unite, this leads to a spike in ticket costs. After all, mergers reduce competition.
In the end, the debate has been a heated topic. It will be interesting to see where American Airlines' final decision rests. What do you think?
Source: MSN.com, "Should American Airlines merge with US Airways?" July 12, 2012