United CEO Defends Bold but Failed Merger Plan

United Airlines CEO Scott Kirby has vented his thoughts – and frustrations – about his failed pitch to merge with American Airlines. He really hoped that the combination would succeed, not from a position of weakness but from one of strength. “The bold idea I wanted to pursue was about growth that would usher in a brand new era of leadership by US aviation,” Kirby said in a statement that was released by United on Monday. Two weeks ago, Bloomberg was the first outlet to report that Kirby had “floated” the idea to President Donald Trump during a February meeting. He had expected lots of (negative) commentary and surely got it, with AirInsight also questioning whether a United/American merger would stand antitrust approval. Last week, American responded that it was not interested in the merger. Kirby acknowledges that the idea is now off the table. But in his statement, he explains why the idea wasn’t as bold as it looked. “I was confident that this combination, which would have been about adding and not subtracting, creating a truly great airline that customers love, could get regulatory approval. I was hoping to pitch that story to American, but they declined to engage and instead publicly closed the door. And without a willing partner, something this big simply can't get done.” Biggest airline A United/American combination would make for the world's biggest airline, with a fleet of over 2.000 aircraft – excluding orders and options. “By combining our airlines and using that scale to revolutionise our customers' experience, we'd create a new, thriving US airline that would be the very best in the world for customers – full stop.” Kirby says that the combined airline would have offered the opportunity to scale and grow further the winning, customer-focused approach that United has successfully implemented. It would also have unlocked new opportunities for both airlines' customers, employees, and the communities they serve. “A merger of United and American (and the growth that would have come with it) would have dramatically increased the total number of economy seats in the marketplace, offering cost-conscious customers more affordable ways to fly to more places and greater choices across all price points, while still delivering industry-best value to all customers. We wouldn't propose a combination that would cause prices to rise for customers.” Emirates Thirdly, the two would create a great new US airline with the scale to compete and lead globally. Kirby doesn’t mention any names, but it is clear which one he is targeting: Emirates. Kirby says: “Today, there's a big trade deficit with foreign-flagged airlines – they fly about 65 percent of the long-haul seats into our country even though only 40 percent of the customers are foreign citizens – and the combined scale of United and American would be a better way to compete with foreign carriers. A larger US global airline would deliver US jobs and economic opportunities. This US airline would set the standard for the next century, just like US airlines used to in the first century of passenger flight. And this would be a great US airline that is the best, whether you're a customer from Chicago, Des Moines or Dubai.” The United/American combination also would benefit the US economy. According to Kirby, it “would have created tens of thousands of new high-paying, unionized jobs with great benefits, which would have led to even more career growth opportunities for the 250.000 employees already at United and American.” “Plus, the combined airline's need for new aircraft would have supported American manufacturing and domestic supply chains and driven even more job creation. And by flying more seats to more places in the US, this merger would boost local tourism and business travel, generating billions of dollars in U.S. economic activity and even more jobs.” MAGA All this would not have fallen on deaf ears with Trump, as it is another way of looking at “Make America Great Again”. Kirby believes the plan would have cleared antitrust hurdles: “While divestitures in certain domestic markets obviously would have been required, I believe regulators would have approved such a deal because they would have recognized the benefits to customers, our shared employees and communities from coast-to-coast and around the world.” But with widespread skepticism from government officials, the media, and Americans, the idea is dead before it even gets a serious opportunity. That’s something that Kirby regrets, but he will look for other opportunities to strengthen United’s position. “While our pursuit of talks with American have ended, our mission to build the greatest airline in the history of aviation at United is well underway. We have a winning strategy, a culture of innovation, and 115.000 of the best aviation professionals in the world working together to deliver for our customers. While the airline industry has always been dynamic and unpredictable (it's one of the reasons that I love this business), United's future is brighter than it's ever been.”

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