Key Takeaways
- Scott Kirby, United Airlines’ CEO, has publicly acknowledged he reached out to American Airlines regarding a possible combination
- American Airlines dismissed the proposal, with CEO Robert Isom labeling it “anticompetitive”
- The merger idea also faced opposition from President Trump
- United revised its annual profit forecast downward to $7–$11 earnings per share
- Shares of UAL have declined 17% this year; AAL shares are down over 20%
United Airlines CEO Scott Kirby publicly acknowledged on Monday that he had initiated discussions with American Airlines regarding a potential merger — a proposal that was ultimately turned down.
United Airlines Holdings, Inc., UAL
Kirby explained that his outreach stemmed from a belief that merging the two carriers would create a more formidable competitor against international airlines, which currently operate more than half of all long-distance flights into the United States.
“I reached out to American to discuss the possibility of joining forces because I believed we could create something extraordinary for our passengers,” Kirby stated.
He revealed that he had presented his vision to the Trump administration earlier in the year, anticipating that the argument for a more robust U.S. global airline presence would resonate with regulatory authorities.
However, American Airlines CEO Robert Isom rejected the concept. During an earnings call last Thursday, Isom informed investors that merging the nation’s two largest carriers would be “anticompetitive,” noting widespread agreement with this assessment.
President Trump echoed this sentiment. During an appearance on CNBC’s “Squawk Box” last week, he stated bluntly: “I don’t like having them merge.”
Kirby Acknowledges Defeat
Faced with resistance from both American leadership and the administration, Kirby conceded that the proposed transaction cannot proceed — at least in the near term.
“Given American’s public stance, it’s evident that a merger of this nature is not feasible for the foreseeable future,” he remarked Monday.
He emphasized that without mutual interest from both parties, a transaction of this magnitude simply cannot advance.
American Airlines declined to provide comment on Kirby’s Monday announcement.
Revised Forecasts Impact Share Prices
The collapsed merger discussions coincide with both airlines adjusting their earnings expectations downward.
United lowered its annual profit projection last week to a range of $7 to $11 per share. The airline attributed this revision primarily to elevated jet fuel costs, which have climbed alongside crude oil prices amid escalating U.S.-Iran tensions.
American similarly reduced its annual forecast, now anticipating a loss of as much as 40 cents per share — comparable to its first-quarter performance.
UAL shares edged higher by 0.1% to $93.10 during early Monday trading, though the stock has fallen 17% year-to-date.
AAL shares rose approximately 0.3% to $12.14, while still posting a decline exceeding 20% since the start of January.
Kirby maintained his position that a United-American combination would have successfully navigated the regulatory approval process, emphasizing potential advantages for passengers and local communities. He recognized that some domestic route divestitures would likely have been necessary.
For the immediate future, both carriers will continue operating independently — facing tighter profit margins and no merger prospects in sight.
