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 rumors emerged earlier this week that United CEO Scott Kirby had floated the idea of a merger with President Trump in a February meeting.
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 detrimental to competition and consumers and therefore inconsistent with our understanding of the Administration’s philosophy toward the industry and the 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 largest airline in the US and worldwide, but its combined market share of around 40 percent in the US would pose significant 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, which would call into question the attractiveness of the combination.
United has not responded to American’s statement. Actually, I didn’t respond at all to the rumors first reported by Bloomberg this Monday. But expect Scott Kirby to carefully thread all strategic options for how his airline could strengthen its market share amid growing international competition.
Even American acknowledges in its statement that the US airline industry requires changes/more consolidation, although this is expected to begin first with the smaller carriers, which together account for just 20 percent of the market, compared with 80 percent for United, Delta, American, and Southwest Airlines.
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