American Airlines and United Airlines planes in Terminal A of Newark Liberty International Airport (EWR) on Thursday, January 12, 2023 in Newark, New Jersey, USA.
Aristide Economopoulos | Bloomberg | Getty Images
american airlines Shares fell in premarket trading Monday after the company declined to discuss a potential megamerger with the company. united airlines Late last week.
The U.S. legacy airline issued a statement Friday, shortly after the market closed, dismissing talk of a possible deal between the two airlines.
“American Airlines is not involved in, and has no interest in, any merger discussions with United Airlines,” the airline said in a statement.
“While changes in the broader aviation market may be necessary, a merger with United Airlines would be negative for competition and consumers, and inconsistent with the administration’s philosophy for the industry and our understanding of antitrust principles,” he added.
American Airlines shares were last down nearly 3% in premarket trading, reversing gains they enjoyed amid a broader market rally on Friday.
United Airlines CEO Scott Kirby floated the possibility of a merger with rival American Airlines at the White House in February with the Trump administration, and the airline is understood to have been considering the idea since at least last fall.
“Size will help” the U.S. compete on outbound flights, Kirby said on the Stratechery podcast in January.
He explained that when customers go to the Middle East, they tend to fly with regional airlines.
“(But) as we grow bigger and can offer more services for our customers, it may make more sense for them to use us when they go to the Middle East.”
A merger would create the world’s largest airline, but it would bring increased scrutiny from regulators and concerns that it could create a market monopoly.
Together with Delta Air Lines and Southwest Airlines, these two airlines already control about 80% of domestic flight capacity.
If United and American merge, the two companies will have about 40% of the domestic market share, according to aviation data firm OAG.
“President Trump, he loves to see big deals happen,” U.S. Transportation Secretary Sean Duffy told CNBC’s “Power Lunch” earlier this month, adding that there was “room for consolidation in the airline industry.”
But Duffy cautioned: “If the major airlines were to merge, they would have to strip away some of their assets. We don’t want one airline to have this large infrastructure in the United States. Again, that will affect pricing in the long run because there will be no competition.”
George Hay, a law professor at Cornell University, previously told CNBC: “This would be the largest in history. I don’t see the slightest chance that the courts would approve that.”
— Leslie Josephs contributed to this report
