US Airways and American Airlines: How the Merger is Beneficial for New York

The merger of US Airways and American Airlines means some good news for New York fliers: now, there will be more domestic and international destinations for New York-area customers, an airport terminal at JFK can be expanded, and 9,000 workers can receive improved job security, company officials and airline consultants told Crain's New York Business.

The new $11 billion venture creates the largest airline in the world, allowing its parent company, AMR Corp., to emerge from Chapter 11 bankruptcy. The all-stock agreement provides AMR creditors with a 72 percent stake in the new American Airlines, while the rest will go to US Airways shareholders. The new airline, still keeping the American Airlines brand, is expected to keep all the airlines' hubs and provide 6,700 daily flights to 336 worldwide destinations, Crain's reported.

All of this puts American at an advantage when it comes to attracting New York business travelers who want to earn frequent flier miles. The combined company will offer 297 daily flights out of New York City area airports, while American currently offers 213 daily departures.

"Our network just grew significantly when you look at the two carriers combined," said Tim Ahern, vice president of New York and international for American told Crain's. "You now have a significant presence in the East Coast market."

Customers of both airlines will benefit. American customers will now have access to southern cities from U.S. Airways hubs in Philadelphia and Charlotte -- and flights between Boston and Washington. U.S. Airways customers will also benefit, because they will be able to take advantage of American's new destinations and Chicago and Dallas hubs, Crain's reported.

This merger may also help when it comes to the expansion of JFK's Terminal 8, which was completed in 2007, but Ahern told Crain's he anticipates seven or eight additional gates, potentially at a cost of $700 million -- an expense American plans to negotiate to decrease.

Although this expansion was always an option, according to Crain's, talks about the space are ongoing between British Airways and the Port Authority of New York and New Jersey, who did not immediately return Crain's request for comment.

Mitchell Moss, director of the Rudin Center for Transportation Policy and Management at New York University, spoke to Crain's about the merger's positive impact on New York.

"This merger," Mr. Moss told Crain's, "guarantees New York's hegemony as a global gateway."