A proposed merger between two of the largest airlines in the United States isn’t moving forward, but that doesn’t mean smaller deals are off the table, according to one CEO.
United Airlines CEO Scott Kirby said in a recent interview with Reuters that although he is no longer pursuing the proposed merger with American Airlines, United remains open to buying other assets from the airline, should they go up for sale.
"I think consolidation is unlikely for United," Kirby told Reuters. "That doesn't mean we won't still be in the market to buy assets, but consolidation is a low probability."
Earlier this year, Kirby floated the idea of combining the two major carriers to American CEO Robert Isom—and ran the idea to President Trump as well—but Isom rejected the proposal.
Kirby went on to say that a merger as large and unprecedented as one with American Airlines could not be achieved without participation from the latter carrier’s management, according to the Reuters report.
"You can't have the management team on record publicly saying it was anti-competitive," Kirby said.
Despite the fact that a merger between the two major carriers appears unlikely for now, Kirby said that United remains open to buying smaller pieces of American’s business, like airport slots and gates, if the current financial pressure pushes American to sell them.
Airlines around the globe are weathering financial headwinds due to the significantly elevated cost of jet fuel.
Many low-cost carriers and those without a loyal cadre of customers are in dire straits. The higher jet fuel costs were the final blow to struggling Spirit Airlines, which was on track to emerge from bankruptcy restructuring before the war with Iran began in early spring but ultimately folded under the weight of expensive jet fuel.
United has a deep well of brand-loyal customers, and travel demand at the airline has remained high despite the fact that airfares have become more expensive.
Kirby also noted that he expects that higher airfares will help United to recover the full financial toll of higher fuel prices by the end of the year.
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