American Airlines CEO Robert Isom has rejected a potential merger with United Airlines, calling it a “non-starter” and “anti-competitive.”
In an interview with CNBC after first-quarter earnings, Isom said: “At the end of the day, there’s no way to view that as anything but anti-competitive. It would be bad for customers, ultimately bad for American Airlines, bad for our team.”
The merger proposal quickly drew opposition from multiple angles. President Donald Trump said he “don’t like having them merge” in a CNBC interview. Senators Elizabeth Warren and Mike Lee sent a letter warning the deal would harm consumers. Transportation secretary Sean Duffy had earlier said there was “room for some mergers,” but the bipartisan pushback proved decisive.
American Airlines said it is “not engaged with or interested in any discussions regarding a merger with United Airlines.”
Jet fuel prices have nearly doubled from $100 to nearly $200 per barrel since the Iran war began, fueling industry consolidation talk. United warned it may need to raise fares 15-20%. Lufthansa has cut 20,000 flights due to the energy crisis.
Delta CEO Ed Bastian noted on an earnings call: “High fuel prices have been the most powerful catalyst for change, separating the winners and forcing weaker players to rationalize, consolidate or be eliminated.”
The Big Four—American, Delta, United, and Southwest—already control 75% of the domestic market. A United-American merger would create a carrier with nearly 40% of U.S. domestic capacity, covering an estimated 289 routes where the two airlines currently dominate. Analysts said antitrust regulators would have blocked it.
“Fewer choices mean higher ticket prices, more fees, and fewer options for anyone who wants to get from point A to point B,” said legal scholar Ganesh Sitaraman.
