United rules out American Airlines merger as industry pressure builds, leaves door open to asset buys
“You can’t have the management team on record publicly saying it was anti-competitive.”
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“You can’t have the management team on record publicly saying it was anti-competitive.”
United Airlines is unlikely to pursue a merger with American Airlines, though the carrier remains open to acquiring airport slots and other assets if conditions tighten, according to a report by Reuters.
CEO Scott Kirby told the outlet that a full-scale consolidation deal is improbable, saying, “That doesn’t mean we won’t still be in the market to buy assets, but consolidation is a low probability.”
Back in April, Kirby said that American declined communications about a merger when he approached them. He argued that such a deal would benefit customers.
He added that while both shareholders and customers would have supported the deal, public opposition from American’s management made the deal impractical.
“You can’t have the management team on record publicly saying it was anti-competitive,” Kirby said.
The comments come as higher fuel prices continue to pressure airline profitability and widen the gap between large and small carriers. Kirby said that United expects higher fares will offset rising costs over time, while admitting that demand could be affected.
He also pushed back on criticism from Willie Walsh, head of the International Air Transport Association, who argued that major US airlines are limiting competition. Kirby said that major airlines like United and Delta are winning because they have brand value to offer to customers.
“Customers care about the technology, the service, the reliability, the product,” Kirby said. “They want a great experience. They don’t just want a seat.”
Kirby also called the idea of fuel hedging to reduce the impact of volatile fuel costs, saying it is "ineffective if you lose money over time.”
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