American Airlines has made some pretty big mistakes in the last few years… Ripping out seatback screens from single-aisle aircraft and a lackluster onboard experience have made the carrier anything but the first choice for many passengers who don’t happen to live in some of the airline’s fortress hubs.
At the same time, United Airlines appears to be going from strength to strength. The carrier has invested in an incredible tech stack, it’s rolling out new long-haul Business Class suites, and, of course, it’s been installing seatback screens across its entire mainline aircraft fleet.
So, when Bloomberg dropped the news on Monday that United chief executive Scott Kirby has reportedly touted the idea of an AA merger with senior Trump administration officials, it might seem like a recipe for an improved passenger experience for captive American Airlines flyers.
But that’s exactly what makes this whole scenario so dangerous: A tie-up between United and American Airlines would create not only the largest airline in the United States but also the world.
Millions of flyers would find themselves living and traveling to markets dominated by just one airline, and that means just one thing: that airline has the power to set prices without even having to consider the competition.
In simpler terms, it means that airfares would rise for everyone.
Thankfully, this scenario is still very much a rumor. Although Kirby’s “overtures” to administration officials were first reported by a highly respected source, we don’t know the full extent of the discussions that have taken place, or whether this is anything more than Blue Sky thinking by Kirby.
What we do know is that the current regulatory market under the current administration is ripe for airline consolidation, and Transportation Secretary Sean Duffy recently said that President Trump is a fan of big business deals.
But quite this big? That’s the question we may, or may not, find out in the coming months.
If Kirby really is serious about a potential merger with American Airlines, then he’ll have to act fast. A deal of this magnitude would take years to clear regulatory hurdles, not only at home, but also overseas, where European and British antitrust regulators would be quick to intervene.
To be clear, the time to get a merger cleared is while Trump is still President. You certainly wouldn’t want the merger process to still be chugging away should a Democratic President take office.
Of course, there’s the fact that Kirby has a history with American Airlines. In a previous life, he was fired from the carrier, and nowadays, he has no qualms about dragging his former employer.
An acquisition of this scale would be the ultimate revenge, but Kirby would need the backing of the board of directors. He can’t simply buy up rivals because of a personal grudge.
So what’s really going on? This could all be a ploy by Kirby to talk up a breathtaking deal to acquire American Airlines but settle for a much smaller deal… the kind that Trump has become famous for.
If that were the case, the hot money is on United making a move to acquire JetBlue, given the existing relationship between the two airlines, and rumors that JetBlue is sniffing around for potential suitors.
