Foreign media reported that United Airlines, one of the United States' "Big Four" carriers, may acquire rival American Airlines. If the two companies merge, the world's largest "aviation giant" is expected to be born.
According to major foreign outlets including Reuters and Bloomberg on the 14th (local time), Scott Kirby, United Airlines chief executive officer (CEO), met U.S. President Donald Trump at a meeting in late February to discuss renovation plans for Washington Dulles International Airport and sounded out a merger with American Airlines. However, it is not known how the merger is proceeding in concrete terms.
Earlier, in a Bloomberg TV interview in March, CEO Kirby said, "We are ready to acquire part of American Airlines' asset," adding, "It's a win-win strategy for both companies." When asked, "Are you planning to acquire American Airlines outright?" he said, "We'll have to wait and see, but there are a lot of such rumors going around."
Along with Delta Air Lines and Southwest Airlines, the two carriers are counted among the United States' four major airlines. If United Airlines acquires American Airlines, a mega carrier with more than $100 billion in revenue (about 147 trillion won) and more than 2,800 aircraft would be created.
If a merger takes place, the impact on the market is also expected to be significant. Based on last year's flight schedules, the two airlines combined would account for about 40% of U.S. domestic capacity.
For this reason, antitrust concerns are also growing. William Kovacic, a professor at George Washington University who served as Chairperson of the Federal Trade Commission (FTC), said, "This looks hopeless," adding, "There is substantial overlap on many routes and in big cities like Chicago. No matter how many business institutional sectors are divested, the chances of resolving this are low."
Ganesh Sitaraman of Vanderbilt Law School also said a merger of the two airlines "would be an absolute disaster for air travelers," noting, "It would lead to higher ticket prices and increased fees, and reduce travel choices." He added, "Even the most permissive antitrust regulators should respond firmly to such a blatantly anti-competitive merger."
Bloomberg reported that if the two airlines merge, a significant portion of major hub airports across the United States would likely overlap, which could trigger strong backlash from smaller competitors worried about losing market share. In fact, an anonymous JetBlue investor also worried that if such a transaction is approved, each airline would have almost no choice but to sell part of its business.
There have been many cases in which airline mergers fell through over antitrust concerns. The merger pushed in 2021 between JetBlue and American Airlines collapsed over antitrust violations, and JetBlue's 2022 attempt to acquire Spirit Airlines also failed over monopoly concerns.
Each company's valuation is also cited as an obstacle to pursuing a merger. According to Reuters, Tom Fitzgerald, an analyst at U.S. investment bank TD Cowen, said American Airlines would likely argue for a price above $20 per share (about 30,000 won) based on $14 billion (about 21 trillion won) in unsecured asset, but questioned whether such a valuation is realistic given United Airlines' additional liability burden.
The two companies declined to answer foreign media questions about whether they are pursuing a merger.