American Airlines Boeing 737 tail
American Airlines is not interested in a merger with United Airlines, it said in a statement late on Friday. It is the first response since rumours emerged earlier this week that United CEO Scott Kirby floated the idea of a merger with President Trump in a meeting in February.
In the statement, American Airlines Group says: “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. We look forward to continuing to work collaboratively with the Administration as it takes steps to strengthen the broader airline industry.”
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Start My Test Flight →A merger would create the biggest airline in the US and in the world, but its combined market share of around 40 percent in the US would create many antitrust obstacles. At some hubs, American and United would dominate by as much as 70 percent. That would result in numerous remedies from the Departments of Justice and Transportation that would question the attractiveness of the combination.
United has not responded to American’s statement. Actually, I didn’t respond at all to the rumours that were first reported on by Bloomberg this Monday. But expect Scott Kirby to carefully thread all strategic options about how his airline could strengthen market share against growing international competition.
Even American acknowledges in its statement that the US airline industry requires changes/more consolidation, although this is expected first with the smaller carriers that together have just 20 percent of the market against 80 percent for United, Delta, American, and Southwest Airlines.
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