Do you see a gap widening between people in first- or business-class and leisure travelers in the back of the plane?
No, I don't necessarily. You described it as the front versus the back, and the reality is all the seats in coach are not the same, and customers prefer certain ones over others and are willing to pay more either through loyalty or just paying more for a ticket in order to get a better seat in the coach cabin.
I don't see a gap in first versus coach as being a major change going forward.
What are your biggest challenges in making this merger work?
It's two complex organizations that need to be melded into one over time. That's the biggest challenge by far. It's not easy, but we have people that have done it before — both airlines have been through a merger in the semi-recent past. We have consultants on board who've done this with other carriers, so we'll learn from what we've seen at others as well as what we've seen ourselves.
Were Justice Department officials right when they said the merger would cause prices to rise?
Airline prices are like prices in other businesses — they track with supply and demand, and we're not reducing any of the supply. Prices may change because demand changes, or they could change for any number of factors like costs going up, but this merger shouldn't have an impact on prices one way or another because we're not taking out any seats.
Will you still compete chiefly on price?
We know that something around 25 percent of our customers will go to the lowest price irrespective of time or inconvenience. In a low-margin business like ours, you can't give up 25 percent of your customers, so we have to match on price.
What's the new American's frequent-flier program going to look like?
Nothing yet to announce. What we do know is this: Customers immediately will be able to combine their miles and use their miles to fly on a larger network.
Would you raise the number of miles needed to earn a trip, or change to a point system?
I don't know. It's going to be important to compete on the in-flight product, it's going to be important to compete for frequent fliers, who will have now three real options to travel around the world.
Are you worried about competition from the fast-growing Middle Eastern carriers?