American Airlines CEO: Fares Won't Rise if Demand Holds Steady As US Airways and American Airlines merge to become the largest airline in the world, questions about further industry consolidation and changing standards remain.

By Matthew J. Belvedere

entrepreneur daily

This story originally appeared on CNBC

Now that American Airlines and US Airways have completed their merger to become the nation's largest air carrier, it's hard to say whether the industry consolidation trend will take a pause, CEO Doug Parker told CNBC on Monday.

He also promised that fares won't rise "as long as demand stays the same."

American as well as United and Delta have global strength with access to the main business centers of the world. So airline competition will be based on how good the in-flight experience is for travelers, Parker said on CNBC's "Squawk Box."

"The three of us have now the ability to take people pretty much anywhere in the world. What used to be a business where it was purely on schedule, if you have the ability to take people everywhere, you have to compete on product. And we're prepared to do that," said Parker, who had been the CEO of US Airways before the merger.

The newly combined carrier began trading Monday morning under the ticker symbol AAL.

With American Airlines coming out of bankruptcy with this merger, Parker said, airlines that aren't profitable won't be able to grow. "We expect to produce a profit that will provide a nice return for our investors. That's what they expect. And that's what we plan to deliver."

The new company's modern fleet will give it a competitive edge, he continued, adding that nothing about this transaction will affect air fares because the carriers are highly complementary. "We're keeping all the airplanes, keeping all the people. So supply should be unchanged. As long as demand stays the same, nothing should happen to prices."

The U.S. Supreme Court refused to grant a stay on Saturday night that would have stopped the merger. The stay had been requested by a group of consumers and travel agents who said the merger would cause "irreparable" injury to the domestic airlines industry.

The newly combined airline faces a tough Monday because of the ice storm that slammed the Southwest on Friday, bringing the northern part of Texas to a standstill, and leading to massive flight cancellations at the busy Dallas/Fort Worth International Airport.

"It's been an extremely rough weekend for our employees and our customers," Parker acknowledged, noting the bad weather, but said the cost of all the canceled flights won't be "overly material" to the airline's bottom line.

Matt Belvedere is a veteran journalist at the intersection of where live television news programs and the Internet meet -- developing and managing an online and social media presence for CNBC's flagship morning show, "Squawk Box."

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Related Topics

Business Solutions

Get a Lifetime of Web Hosting for $90 for a Limited Time

Don't miss this special price drop, this week only (regularly $899).

Leadership

Are You a Great Leader or an Average Leader? Use This Chart to Find Out.

The new book, "Stop the Shift Show," breaks down the qualities of those who really know how to get the best out of employees.

Growing a Business

Celebrity Chef Maneet Chauhan Shares Her Best Tip for Aspiring TV Chefs

Chef and restaurateur Maneet Chauhan discusses the reality of being a chef, sharing stories online and becoming a food TV personality.

Growing a Business

Expand Your Knowledge and Unlock Success With These Must-Read Business Books

Top business books to ignite your entrepreneurial journey.

Health & Wellness

How Taking Up Boxing Transformed My Outlook on Entrepreneurship

Few things have taught me more about entrepreneurship than getting into boxing. Here are the three most important lessons I've learned from my time in the ring.