How could merger of American and US Airways affect Lexington?

ssloan@herald-leader.comFebruary 14, 2013 

With the long-discussed merger of American Airlines and US Airways officially proposed Thursday, airports across the country, including Lexington's, are assessing what it could mean to their local operations.

The proposed deal comes a year after Blue Grass Airport in Lexington felt the effect of another airline merger. Last August, AirTran pulled out of Lexington after Southwest Airlines, which acquired the company in 2011, decided to cease operations here. AirTran had offered daily non-stop service to Orlando, Fla.

Both American Airlines and US Airways are secondary players at Blue Grass Airport behind the dominant Delta Air Lines, which has more than 40 percent market share.

Blue Grass Airport spokeswoman Louise Bowden noted there is no overlap between the two airlines. American Airlines, which had 12 percent market share in December and in all of 2012, flies to Chicago's O'Hare International Airport and Dallas/Fort Worth International Airport.

US Airways, which had 17 percent market share in December and 15 percent for all of 2012, flies from Lexington only to Charlotte, N.C.'s Douglas International Airport.

Both airlines generally have about six flights daily, Bowden said.

All three destinations that are served are hubs of their respective airlines, raising questions about what would happen if the merged airline would reduce operations at any of the three sites. Both airlines said in a joint statement that they intend to maintain all hubs.

"That bodes well for the communities where both serve or some of those that are only served by one or the other," said aviation industry consultant Robert Mann.

Adie Tomer, associate fellow with the Brookings Institution public policy organization, added the extremely small amount of overlap system-wide between the two airlines is a positive for smaller airports like Lexington's.

"We would argue it has to do with how much business is occurring outside of the airport in those three markets," he said of Lexington's three destinations served by the airlines. "How many people are flying to Dallas, Chicago and Charlotte and then leaving the airport on the other side? ... There should be optimism for not just Lexington but markets of similar size at the end of the day if you use those connections.

"I think Lexington is going to still enjoy that same kind of connection."

Tomer also said Lexington's flyers should not expect price increases as a result of the merger.

"It's not like the only game in town was American and US Air and now it's down to one and there's a stranglehold," he said.

But Mann said prices will generally be rising because of increased fuel costs and the need for airlines to reinvest in themselves for future service.

One certainty, though, is that if change is coming, it won't be immediate, Bowden said.

"It's often a wait-and-see game for airports," she said.

Scott Sloan: (859) 231-1447. Twitter: @HeraldLeaderBiz

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