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And then there were 3; American Airlines merging with US Airways

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The long-awaited courtship between US Airways and American Airlines has finally come to fruition with the announcement that the two carriers plan to become one, creating the world's largest airline.

First it was Delta's 2008 takeover of Twin Cities-based Northwest Airlines, which at the time made Delta the largest airline. Not to be outdone, United Airlines merged with Continental Airlines in 2011, making the new United larger than Delta. And now, the combination of US Airways and American will leapfrop both mega-carriers, leaving the U.S. with just three major international carriers - Delta, United and American, whose name will survive the merger despite US Airways CEO Doug Parker being tagged to run the mega-carrier. American's CEO Tim Horton will receive a $20 million severance package to hit the road, so to speak.

While Southwest Airlines is the leading domestic carrier with its fleet of more than 600 aircraft, the Dallas-based company does not fly internationally just yet. With its acquisition of AirTran Airways however, the Southwest brand will be moving into Mexico and the Caribbean very quickly.

The impact of the latest merger of major U.S. airlines remains to be seen, but there is little doubt that fares will continue to rise along with profits. Airline executives, after years and years of operating too many flights with too few passengers, have finally determined that offering inventory in line with demand leads to profitability. So, air travelers can expect fewer flights and smaller aircraft to dominate the skies in the years to come. While Delta, for example, continues to offer more than 400 daily flights from its Minneapolis/St. Paul International Airport hub, a higher percentage than ever operate on 76-passenger regional jets instead of 100+ passengers aircraft.

The combination of US Airways and American will create a massive airline with 6,700 daily flights to 336 destinations in 56 countries. In total, US Airways and American have 607 new aircraft on order, 517 of which are narrow-body for domestic and short-haul international flights, plus 90 wide-body aircraft slated for overseas international service. With the merger, the two airlines will add 122 new destinations to their route system.

As is always the case, it will take many months for government approval of the merger, and at least a couple of years for complete integration of staff and aircraft. The frequent flier programs will remain separate for some time to come, but will eventually be merged as well. Labor union agreements between US Airways and American's employees were reached prior to the merger announcement, which should make for a smoother integration of the two companies.

TWA, Pan Am, Northwest, Eastern, Western, Continental, Texas International, Republic, People Express, Ozark, America West, US Airways, Braniff, Aloha, North Central, Southern, New York Air, Allegheny, Piedmont, Mohawk, Midwest, Air Florida, and many more airlines have come and gone, either by merger or bankruptcy.

The future appears to belong to American, United, Delta, Alaska, Southwest, Spirit, Allegiant and a handful of other smaller carriers.

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