A proposed merger between United and American Airlines could reduce competition, raise fares and reshape the U.S. airline industry if approved.
United Airlines has pitched an idea to President Donald Trump that could dramatically change the landscape of the U.S. aviation industry. The talk of the town is a potential merger between United Airlines and American Airlines, and if it were to go through, it could raise ticket prices, reduce options and lower competition.
In February, United CEO Scott Kirby floated the idea to President Donald Trump during a meeting, Reuters reported. The meeting took place Feb. 25, according to two unnamed sources, and Kirby argued that the merger would strengthen competition against international airlines. In September, he had also said that foreign carriers account for two-thirds of the seats to and from the U.S., despite the fact that 60% of passengers are U.S. citizens.
The conversation took place before the U.S. attacked Iran, which led to the closure of the Strait of Hormuz and a massive global oil crisis. The war has hurt airlines around the world by raising jet fuel prices, which are expected to trim margins this year.
It is not known whether President Trump was open to the idea, but Transportation Secretary Sean Duffy said earlier this month that there was room for an airline merger. President Trump likes to see big deals happen, he added, but also warned that such a merger would face scrutiny.
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Meanwhile, industry experts remain skeptical.
The U.S. has four dominant airlines, each with about 17% market share: United, American, Southwest and Delta. A merger between two of these would create a behemoth airline with nearly 40% of the market. Such a deal is unlikely to be finalized. Although it is not known whether United has approached American, the consolidation would face opposition from antitrust regulators, competitors, unions and airports.
In 2024, the Justice Department blocked JetBlue’s attempt to acquire Spirit, citing concerns that it would reduce competition and raise prices. The Trump administration is more relaxed about mergers, but even if the airlines are able to convince the administration, it would be an uphill battle. Overlapping routes would need to be cut, and airlines would likely have to shed assets. Job losses could follow, and consumers could face fewer flight options and higher prices.
Scott Keyes, founder of Going.com, told Fodor’s that this merger is unthinkable after decades of consolidation and public backlash. “Until last year, a United-American tie-up was more likely to be seen in a comedy sketch than the business news. But these are unusual times and this is the friendliest presidential administration for airline mergers that we’ve seen in decades.” If there were ever a time for these two airlines to join forces, it is now.
American Airlines trails United and Delta in profits, and pilots and flight attendants have expressed a lack of confidence in its leadership, criticizing the airline publicly. Meanwhile, American is investing in more premium offerings, including seats and lounges, to catch up with its rivals.