American Airlines CEO labels merger with United a non-starter: ‘There is no way to view this as anything other than anti-competitive’

(SeaPRwire) –   American Airlines CEO Robert Isom on Thursday voiced his strong opposition to the rumored American-United merger, becoming the most significant figure to reject the proposal.

In an interview with CNBC on Thursday, following the company’s first-quarter earnings report, Isom described the potential merger as a “non-starter from the get-go.”

He stated, “At the end of the day, there’s no way to view that as anything but anti-competitive.” Isom further elaborated that the deal would be “bad for customers, ultimately bad for American Airlines, bad for our team.”

The proposed merger faced swift rejection from various parties shortly after United CEO Scott Kirby reportedly presented the idea to a Trump administration official. President Donald Trump was among the first to dismiss the concept. Despite his general openness to large deals, as seen in his involvement with the $81 billion Paramount-Warner Bros. Discovery merger, Trump stated in a CNBC interview on Tuesday, “I don’t like having them merge.” This sentiment was echoed by a bipartisan group of legislators, with Sen. Elizabeth Warren (D-Mass.) and Sen. Mike Lee (R-Ariz.) warning of potential harm to consumers.

Isom refrained from commenting on whether United had formally approached American. However, American issued a statement last Friday asserting that it is “not engaged with or interested in any discussions regarding a merger with United Airlines.”

United and American Airlines did not immediately respond to requests for comment from [News Outlet Name].

The Iran War’s Influence on Merger Speculation

One factor potentially fueling discussions about industry consolidation is the escalation of fuel costs. Jet fuel prices have surged from approximately $100 a barrel before the conflict to nearly $200 a barrel, posing challenges even for major airlines. United announced on Wednesday that it might need to increase prices by 15% to 20%. In Europe, German carrier Lufthansa has already canceled 20,000 flights due to the severe conditions in the market amid the ongoing energy crisis. These price shocks have contributed significantly to the consolidation conversations.

Transportation Secretary Sean Duffy remarked to CNBC earlier this month, “Is there room for some mergers in the aviation industry? Yeah, I think there is.” Delta CEO Ed Bastian shared a similar perspective.

During Delta’s earnings call last week, Bastian commented, “Over my career, I’ve seen many periods of disruption in this industry. Time and again, high fuel prices have been the most powerful catalyst for change, separating the winners and forcing weaker players to rationalize, consolidate or be eliminated.” Delta reported first-quarter revenue of $14.2 billion, a 9% increase year over year and slightly exceeding expectations. However, the company indicated that its fuel expenses would be $2 billion higher than anticipated due to the cost spike.

The four largest U.S. airlines, known as the Big Four (American, Delta, United, and Southwest), already control 75% of the domestic market share. If American and United were to merge, their combined share of U.S. domestic capacity would approach 40%, according to airline data firm OAG. Experts suggest that such a deal would face significant antitrust challenges.

Ganesh Sitaraman, a legal scholar and author of Why Flying Is Miserable: And How to Fix it, told Reuters, “Fewer choices mean higher ticket prices, more fees, and fewer options for anyone who wants to get from point A to point B.”

Customers could also experience a reduction in available flight routes. Airline analyst Tom Fitzgerald of TD Cowen informed CNBC last week that the merger would necessitate the combined airline selling off operations on an estimated 289 routes where either American and United are the sole carriers or one of only two operating.

Several other proposed airline deals have been blocked by the Biden administration in recent years. The administration successfully sued to prevent the $3.8 billion JetBlue-Spirit merger, with a federal judge ruling in favor of the government. In a separate development, Trump is reportedly close to finalizing a $500 million rescue plan for Spirit Airlines. This unconfirmed deal could involve the government receiving warrants to purchase Spirit stock, potentially giving taxpayers a stake in the company if it recovers financially.