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United Airlines Chief Executive Scott Kirby has hit out at American Airlines for refusing to consider a tie-up between America’s two biggest carriers, claiming the combination would create thousands of jobs.
In the first public confirmation of United’s approach to its rival, Kirby argued that the merger would boost the American aerospace industry and create an airline capable of competing globally.
“I was hoping to bring that story to American, but they declined to engage and responded by publicly closing the door,” said Kirby, who was American’s chairman before moving to United in 2016.
The failure of United’s US exploration comes as energy shocks from the Iran war threaten airline industry profits. Chicago-based United last week cut its annual profit forecast, while American reported $400 million in additional jet fuel costs for the first quarter.
American, which has a market capitalization of $8 billion compared with United’s $30 billion, said this month it was not interested in a deal, which it warned would be “negative for competition and consumers.”
United’s shares rose 0.9 percent in early trading Monday, while American’s shares were little changed.
The potential tie-up also drew skepticism from analysts, who pointed to the combined airline’s hold on several travel hubs in the US, including Chicago’s O’Hare Airport.
Sawanthi Sith, an analyst at Raymond James, said a deal would be “great” from a shareholder perspective, provided “you combine American’s strength in Latin America and the UK with United’s strength in the Pacific and continental Europe, so you really create a global powerhouse”.
But he cautioned that “from a regulatory perspective, you are creating an airline that is twice as big as any of its competitors and has about 40 percent of the US market”, adding that even with concessions to competition regulators “it will be politically difficult to get it in line”.
US President Donald Trump has also cast doubt on the merits of the deal, telling CNBC this month that “I don’t like their merger”.
Some industry observers have speculated that Kirby, who has led United since taking the top job in 2020 during the coronavirus pandemic, may talk about a merger with American as a way to convince the Trump administration of the merits of merging with another airline, such as New York-based JetBlue.
In recent years, American has struggled to keep up with United and Delta, whose fortunes have risen amid growing demand from premium, business and long-haul travelers.
The Dallas-based carrier reported a net profit of just $111 million last year – down 87 percent from the previous year – while United was projected to have a net profit of $3.4 billion in 2025.
But Syth stressed that, while American “needs to improve its finances,” the airline was not in trouble.
