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US Airways doesn't fly to Asia and American's presence there is dwarfed by United and Delta's substantial footprint. But the real key to the merger is US Airways' comprehensive service to small cities along the East Coast. The airline's CEO, Doug Parker, proudly told investors at the company's June annual meeting that if his airline combined with American, it would have the largest market share east of the Rockies. Both airlines need to capitalize off passengers traveling from those small cities, such as Allentown, Penn., Elmira, N.Y., and Lynchburg, Va. For instance, American can charge high fares for flights to London but can only make money off the flight if it can fill it with enough passengers. Those passengers can come from US Airways' network. "US Airway (currently) loses money on that short segment, but if they can carry that passenger to another major hub or fly them internationally, they capture that incremental revenue," says Vaughn Cordle, an airline analyst and co-founder of Ionosphere Capital. American would also gain US Airways' lucrative shuttle service between New York, Boston and Washington D.C.
[Associated
Press;
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