United CEO Suggests Merger with American Airlines

In a meeting with President Trump at the White House, United Airlines CEO Scott Kirby apparently floated the idea of a significant merger with American Airlines.

This discussion took place on February 25, where Kirby contended that merging airlines could enhance their global competitiveness. However, sources familiar with the administration expressed doubts about the feasibility of such a proposal.

Any potential partnership would likely face serious antitrust challenges, especially considering the current state of the U.S. airline market, which is dominated by four major carriers that hold approximately 70% of market share. Regulators are generally cautious about any moves that might further diminish competition.

United has around 16.7% of the U.S. domestic market, and American holds about 17.4%. If these two were to combine, they would control over a third of all airline traffic, which raises concerns among regulatory bodies.

A spokesperson for United chose not to comment on the matter. Efforts to reach American Airlines and the White House for statements were also made.

Following this news, American Airlines saw its shares increase by nearly 8%, while United’s shares rose around 2%, indicating positive investor sentiment about the merger possibilities.

The landscape for airline mergers has become increasingly complex, as evidenced by recent industry trends. In 2024, the Justice Department successfully halted JetBlue’s attempt to acquire Spirit Airlines, arguing that the merger would eliminate low-cost competition and drive up fares; a federal court ultimately blocked it.

Furthermore, the Justice Department previously opposed a partnership between American Airlines and JetBlue, claiming it stifled competition in the New York and Boston markets, and a judge ordered that merger to cease.

Even historical mergers faced stringent regulatory frameworks. For instance, when American Airlines merged with US Airways in 2013, it required divestitures of slots and gates before approval. Similarly, United Airlines had to make concessions during its merger with Continental Airlines in 2010.

William Kovačić, a former Federal Trade Commission Chairman, said that the merger proposal between United and American seems “far-fetched” and faces numerous regulatory hurdles.

Kovačić, now teaching at George Washington University, highlighted the difficulty regulators might have in approving such a merger due to the direct competition between the two airlines in many key markets.

“It’s hard to envision a scenario that addresses antitrust concerns,” he noted, adding that without a creative solution, approval seems unlikely.

Even if federal regulators showed willingness to green-light the merger, state regulators could intervene to block it, according to Kovačić. He suggested that numerous state attorneys general would likely unite to oppose it, arguing that White House backing might not be sufficient to circumvent these issues.

Additionally, if the merger were to go through, Kovačić warned it could negatively impact consumers, suggesting an increase in fares and possibly a drop in service quality.

Michael Boyd, an industry consultant and CEO of Boyd Group International, speculated that merger discussions might be more of a trial balloon than a serious pursuit. He pointed out logistical and political obstacles, emphasizing that the complexities of merging two large airlines make the endeavor appear daunting.

“Trying to put together such a merger would look like a wiring diagram for a space shuttle,” Boyd remarked.