Talks about a successful merger between United Airlines and American Airlines went nowhere. Now, it seems United are setting their sights on… well, no one.
The Chicago-based airline said Wednesday it expects not to make any major deals with the airline industry in the near future after American rejected his proposals about joining forces.
“I don’t think United, for one, is going to engage in any consolidation, at any point that I can see in the foreseeable future,” Chief Executive Scott Kirby said, speaking Wednesday at the Bernstein Strategic Decisions Conference in New York.
Why is that newsworthy, you might ask?
On the one hand, there had been much speculation that United could be interested in a merger with some another airline, even after American said publicly in April that it had no interest in partnering with its main rival.
Some industry experts had suggestedat the time, that United, in negotiating a deal with American, may have been trying to soften the proverbial waters with regulators to set the stage for a potential JetBlue acquisition.
Looks like we can rule it out.
“Just idiotic,” Kirby said of the idea Thursday.
“I wish them luck,” he said of JetBlue, but added: “The last thing I’m going to do is buy a route network that loses money.”
Reward your inbox with TPG’s daily newsletter
Join over 700,000 readers to receive breaking news, in-depth guides, and exclusive offers from TPG experts.
He’s referring to JetBlue’s lackluster financial performance in recent years, which has seen the airline lose money every year since 2019. It posted a loss of more than $300 million during the first quarter of this year.
Continue with the blue sky
Kirby maintained his support for United and JetBlue’s new Blue Sky partnership, which released last fall and now includes mutual loyalty benefits for loyal MileagePlus and TrueBlue members.
The deal will also lead to United’s return to New York’s John F. Kennedy International Airport (JFK) next year.
But it seems that will be the extent of the relationship between the two companies, at least for the moment.
What happened to the American discourse?
Kirby at the end of April confirmed He “approached American” to explore a merger, which would have created by far the largest airline in the United States, saying that he “thought together we could do something amazing for customers.”
such treatment would have raised significant antitrust concernsexperts told TPG, and American publicly poured cold water about the idea before talks progressed.
Mergers still to come?
Still, airline industry leaders have speculated More deals may be yet to come – especially as shippers continue to face high fuel prices.
In April, Delta Air Lines CEO Ed Bastian noted that similar circumstances in the 2000s fueled the wave of consolidation across the U.S. airline industry.
It’s worth noting: we’ve already seen one merger this year. Low-cost Allegiant Air this month closed on acquisition of Minnesota-based Sun Country Airlines.
In a nutshell
However, even if merger talks intensify across the industry, Kirby said United will likely stay away, having pivoted from the only deal it was (apparently) interested in.
“For many years I have thought that only the large type of transaction we attempted was the only one that made economic sense,” he said. “However, I also knew that the large transaction required a willing partner. Which we clearly don’t have.”
Related reading:
