American Airlines has publicly gone on the record to say it’s not interested in a potential mega merger with United Airlines after Scott Kirby, United’s chief executive, allegedly approached senior Trump administration officials to broach the idea of acquiring its rival.
News of Kirby’s alleged interest in American Airlines first emerged on Monday, but it wasn’t until late on Friday, when the markets closed, that the Texas-based carrier decided to formally address the reports.
“American Airlines is not engaged with or interested in any discussions regarding a merger with United Airlines,” a statement from the carrier read.
“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,” the statement continued.
American Airlines’ stock rose by over a percentage point on Monday after the reports of Kirby’s talks with Trump administration officials first broke. The stock price has steadily risen throughout this week, while American Airlines remained tight-lipped on the reports.
Given that Kirby had first gone to the White House before approaching American Airlines about a potential acquisition, the statement from AA was heavily focused on pandering to the Trump administration.
“We appreciate the leadership and strong support of President Trump, Secretary Duffy, and numerous other leaders in the Administration who have demonstrated expertise and an ongoing commitment to continue to improve the world’s best aviation industry,” the statement read.
It added: “We look forward to continuing to work collaboratively with the Administration as it takes steps to strengthen the broader airline industry.”
There had been suggestions that American Airlines was remaining quiet about a potential merger because its board of directors was seriously considering the potential of pursuing the deal.
The White House has made it clear that it is pro-airline consolidation, but a merger of this magnitude is on a scale that might even make President Trump balk.
A merger between American Airlines and United Airlines would most definitely be challenged, not only in federal and state courts, but also internationally, including by competition authorities in Europe and Asia.
The process could easily drag on for years and would likely still be open by the time that President Trump leaves office. At that point, the risk of a new administration trying to unpick the merger would be significantly increased.
