How to Exploit the American Airlines/US Airways Merger

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The merger of American Airlines and US Airways, announced today, is no news in the near term, fantastic news in the medium term, and bad news in the long term for me and similarly situated frequent flyer mile hackers.

No News in the Near Term

Your US Airways Dividend Miles are still there. They can still be used to book all the same awards as you’re accustomed to on Star Alliance partners.

Your American Airlines AAdvantage miles are still there. They can still be used to book the same awards as you’re accustomed to on oneworld partners.

Fantastic News in the Medium Term

In the next 12-36 months, the value of AAdvantage miles and Dividend Miles will both rise. Why?

1. We are unlikely to see chart devaluations for two or more years. There are other things to do in a merger, and angering loyal customers is at the bottom of the list.
2. We are likely to have the ability to transfer miles between our US Airways and American Airlines accounts. This was a feature of the United/Continental merger. This is still an incredible feature of the Southwest/AirTran merger.
3. We are definitely going to have our US Airways and American miles combined at some point. The whole is greater than the sum of the parts. One big balance gives you more options than two medium ones.

The US Airways chart has to be devalued soon. It is way too generous. I’ve written a handful of posts on its sweetspots to South America, within South America, to Australia via Asia, within South Asia, and to North Asia.

The American Airlines chart was possibly the next devaluation. Its off peak awards, and prices to Australia and Asia were happily below market price.

The merger will postpone the devaluations because the new American wants to keep its loyal customers loyal.

Until the two loyalty programs of the former US and former AA merge, there will be two award charts. And if this merger is anything like United/Continental or Southwest/AirTran, we will be given the option to link our US Airways and American Airlines accounts and transfer miles between them freely.

That would be fantastic news in the medium term because not only could you combine your miles for more incredible awards, but you could select the better chart for each award you do book and have access to all of the Star Alliance and oneworld.

That means all of US Airways sweetspot awards, oneway bookings through American, the Star Alliance’s strength to Europe, and oneworld’s strength to South America could all be harnessed whether you currently have a stash of US miles, AA miles, or some of each.

Of course, you couldn’t get all those on the same award. You would either have to transfer to US Airways and use its strengths or transfer to AA for its strengths. But I am salivating at the possibility. Unfortunately this remains only a possibility because no details were given on whether this transferring would be allowed. I sure hope it is.

We can be almost positive that when the two loyalty programs officially merge into one programs our miles will be combined. That’s good because one larger balance is always worth more than two smaller ones. Among the many benefits of one larger balance will be the increased likelihood you have enough miles for American Airlines Explorer Awards–their most valuable awards, which I’ll be discussing in depth in the next week.

Bad News in the Long Term

The merger is good news for the airline industry and bad news for consumers in the long term. Fewer airlines will mean less competition. We’ll see higher fares–and far worse–fewer credit card offerings possibly with lower sign up bonuses.

In a few years, instead of seeing the Citi American Airlines cards and the Barclay’s US Airways cards, we’ll see just the New American Airlines cards, wherever they are issued.

How to Exploit the American Airlines/US Airways Merger

While the two airlines are still separate and issuing their own credit cards and miles, I am going to try to rack up as many as possible of each kind.

As I’ve said, best practice is to apply for one personal card from each issuing bank every 91 days. Normally I get the card with the most valuable sign up bonus at the time, but there are occasionally other things to consider. The fact that Barclay’s US Airways MasterCard is virtually certain to disappear, and the Citi American Airlines cards may also disappear strongly argues for getting these cards now.

Barclay’s US Airways MasterCard Strategy

In my experience, and other reports I’ve read, you can get at least two Barclay’s US Airways MasterCards. They can be open simultaneously, and you can get the 30,000 mile bonus twice. You should apply for a Barclay’s US Airways MsaterCard today.

Application Link: US Airways Premier World MasterCard with 30,000 US Airways miles after first purchase

In 91 days, you should apply for the card again. In 182 days, you should check back here to see whether people have had success getting three.

You should be able to rack up at least 60,000 US Airways MasterCards in this way before the merger. You can use those miles on US Airways’ fantastic chart or, in the future, on the new American.

There is also a US Airways Business MasterCard with 25,000 US Airways miles after first purchase. I would consider this card too. Its sign up bonus isn’t huge, but it will disappear soon, and I don’t know of any better business cards offered by Barclay’s.

Citi American Airlines Card Strategy

Citi has several American Airlines cards. Until recently, you could get two at the same time. I think the two browser trick is dead from the reader emails and FlyerTalk reports I’ve read.

But you can still get one personal American Airlines card now for 30k miles and one business card for another 30k.

• Citi® Platinum Select® / AAdvantage® World MasterCard®
• CitiBusiness® / AAdvantage® World MasterCard®

You can’t get a new AA personal card every 91 days. You actually have to wait 18 months between applications. With the slow pace of airline mergers, you may be able to get AA cards now and in 18 months before the merger is completed.

What Cards Will the New Airline Offer?

No one knows for sure. Since the US Airways brand is disappearing, we know its cards will too, making getting the US Airways Premier World MasterCard a more pressing matter. I hope both cards are discontinued, and a new one is released. A new card would mean a new sign up bonus we were all eligible for.

Time to Burn Miles?

I think we’ll be given several months notice whenever the status of our miles or an award chart will change, so I am not in burn mode for now. When we get that notice, we will probably be able to book under the old rules for a few months plus be able to book flights 11 months in advance. With all that lead time, I am in no hurry to burn. I will be booking awards at my normal rate for myself based on my travel desires, not a need to zero out my balances.

Recap

The American Airlines/US Airways merger is no news for now, fantastic new for the next few years, and bad news afterwards. There is no hurry to burn either type of miles, but there is a hurry to earn both types before opportunities to do so disappear. I recommend getting the US Airways MasterCard and Citi American Airlines cards now (and again later) before they disappear.

Application Link: US Airways Premier World MasterCard with 30,000 US Airways miles after first purchase

Application Link: Citi® Platinum Select® / AAdvantage® World MasterCard® with 30,000 miles after $1k in spending in the first three months

Application Link: CitiBusiness® / AAdvantage® World MasterCard® with identical 30k mile sign up bonus after $1k in spending in the first three months