April 17 (Reuters) – American Airlines said on Friday it was not interested in merging with United Airlines and was not holding any such talks, dampening prospects for an industry-shaping deal that would face intense regulatory scrutiny.
A merger of the two largest U.S. network operators would mark the biggest consolidation move in more than a decade, further tightening a domestic market already dominated by four similarly sized carriers. According to OAG, United and American Airlines will become the world’s two largest airlines by available capacity by 2025, including international flights.
However, analysts and industry officials say the scale will draw special scrutiny from regulators, unions and consumer advocates, who worry about rising fares and reduced competition, leaving the deal with little chance of approval.
There’s also significant overlap between American and United, including at Chicago’s O’Hare Airport and major hubs in Texas.
“While the broader aviation market may need to change, a merger with United would have negative impacts on competition and consumers,” American said, adding that such a deal would be inconsistent with its understanding of the Trump administration’s approach to antitrust enforcement.
United declined to comment, and the White House did not immediately respond to a request for comment.
The White House has previously said it has no objection to a potential deal for United Airlines to acquire American Airlines.
United Airlines CEO Scott Kirby raised the possibility of a merger with American Airlines during a meeting with U.S. President Donald Trump in late February, Reuters reported on Monday.
The meeting with Trump came three days before the outbreak of the U.S.-Israeli war with Iran, which has sent jet fuel prices soaring and caused airlines to raise fares and fees to offset higher costs.
According to sources, Kirby told administration officials that the combined airline would become a stronger competitor in international markets, noting that the Trump administration has been concerned about the U.S. trade deficit around the world.
But a person close to the White House told Reuters there was skepticism about the tie-up given its potential impact on competition and fares, at a time when the administration is already focused on raising consumer costs ahead of the November midterm elections.
(Reporting by Aditya Soni and Megavarshini G. Somasundaram in Bengaluru; Editing by Pooja Desai)
