If you’ve been following travel news this week, then you’ve probably seen one of the biggest stories making the rounds: the idea of United Airlines (UA) buying American Airlines (AA).
According to CNBC, United Airlines CEO Scott Kirby reportedly floated the idea of a potential tie-up with rival American Airlines to the Trump administration earlier this year, a move that would create the world’s largest airline.
American and United are not only two of the largest airlines in the United States but in the world. Most people would assume a deal like this would never get approved, but the story gained traction quickly because, as we’ve seen with the Trump administration, you never quite know what could happen.
The two airlines stayed quiet for a couple of days, but that changed today when American Airlines released a statement shutting down speculation about a potential merger, making it clear the company is not interested in pursuing any deal.
Here is part of the statement:
“We appreciate the leadership and strong support of President Trump, Secretary Duffy and numerous other leaders in the Administration who have demonstrated expertise and an ongoing commitment to continue to improve the world’s best aviation industry.
American Airlines is not engaged with or interested in any discussions regarding a merger with United Airlines. While changes in the broader airline marketplace may be necessary, a combination with United would be negative for competition and for consumers, and therefore inconsistent with our understanding of the Administration’s philosophy toward the industry and principles of antitrust law. Our focus will remain on executing on our strategic objectives and positioning American to win for the long term.”
I do find the timing interesting. The statement was released the same day as American Airlines’ 100th anniversary, which raises some eyebrows. It could be coincidental, or it could be a strategic way for Scott Kirby to get back at American for not choosing him, a former AA executive, as their next CEO, which made it easier for him to jump ship to their biggest competitor. Or it could be that United is really just interested in buying JetBlue, which the previous administration would never have approved, since they blocked the JetBlue and Spirit Airlines merger. So they may just be trying to play with the DOJ.
If a merger between American and United were ever to happen, it would likely have a major impact on consumers. Fewer competitors on key routes typically lead to higher fares and reduced service options, which is why deals of this scale tend to face intense scrutiny.
For now, though, American’s message is clear: a merger with United is not on the table.
