U.S. Airways-American Merger to Spur Robust Competition, Better Customer Service: UMD Expert

   U.S. Airways-American Merger to Spur Robust Competition, Better Customer
                             Service: UMD Expert

PR Newswire

Feb. 14

COLLEGE PARK, Md. -- Improved customer service driven by robust competition
lies ahead of the new U.S. Airways-American Airlines merger, says Michael
Ball, a University of Maryland expert on transportation systems and airport
operations.

(Ball co-directs NEXTOR, the National Center of Excellence for Aviation
Operations Research. He oversees the Collaborative Decision Making research
project for the center, which is funded by the FAA, NASA and other airline
industry members.)

The move creates the world's largest carrier in a market dominated by four
airlines. "The merger is a natural, almost inevitable evolution of the U.S.
airline industry. The newly combined carrier, together with Delta, United and
Southwest, will represent a strong group of competitors – each having a robust
national footprint," says Ball, associate dean for faculty and research and
Dean's Chair in Management Science in UMD's Robert H. Smith School of
Business.

Fares could increase in a limited number of markets due to reduced
competition. But overall, and especially long-term, the merger will be
advantageous for passengers, Ball says. "The four strong competitors will
generally expand their national footprints, creating greater competition. In
addition, as the airlines individually become healthier, they will be able to
focus more on improving customer service and providing more innovative
services, which should improve the customer experience."

Look for consolidated service and fewer flights in some markets, such as
Charlotte-LaGuardia, he adds. "This is consistent with the impact of previous
mergers and generally should be viewed as positive, reducing overall
congestion and delays."

Ball also projects realignment of the combined U.S. Airways-American network,
including some consolidation of the existing Dallas and Phoenix hub
operations. "Most likely operations will be reduced at Phoenix with some
potential increase in Dallas. No doubt there will be some rethinking of the
combined strategy at Philadelphia and (New York) Kennedy, especially service
to Europe with associated connections," he says. "The eventual outcome is hard
to predict, but certainly changes will take place."

While the combined U.S. Airways-American corporation has potential to be much
stronger than the two as individual carriers, Ball cautions "a successful
merger is by no means an easy task."

He says each airline today has different union representation, different sets
of policies and procedures, different fleet characteristics and different
operational control and planning systems. "A high degree of care and
flexibility on the part of management and employees and investment of time and
resources will be necessary. While it is unlikely that poor performance in
these areas would derail the merger, it is certainly possible to induce a very
long lag before a strong and robust combined airline would emerge."

Ball can be contacted at301-405-2227ormball@rhsmith.umd.edu.

/PRNewswire-USNewswire -- Feb. 14, 2013 /

SOURCE Robert H. Smith School of Business

Website: http://www.rhsmith.umd.edu
 
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