American Airlines (NYSE:AAL) is trading 4.99% higher during the pre-market trading session on Tuesday amid reports that United Airlines Holdings (NYSE:UAL) CEO Scott Kirby has suggested a potential merger with the company.
United Airlines is trading 1.45% higher in the pre-market session.
Kirby presented the merger proposal to President Donald Trump in a late February meeting, reported Reuters on Monday. Originally intended to discuss the future of Dulles airport, the meeting took place just three days before the U.S.-Israeli war with Iran began.
Kirby reportedly argued that a united airline would be a more formidable competitor in international markets, as he pointed out that the Trump administration has been focusing on U.S. trade deficits globally.
It’s unclear if United has formally approached American or begun any process.
United Airlines, American Airlines and White House did not immediately respond to Benzinga’s request for comments.
Airline Mergers Back in Focus
This news comes in the wake of Transportation Secretary Sean Duffy signaling approval for possible mergers between U.S. airlines amid rising jet fuel costs. In an interview with CNBC, Duffy mentioned that Trump “loves to see big deals happen” and there was “room for some mergers in the aviation industry” in the U.S.
After the collapse of JetBlue Airways Corp.‘s (NASDAQ:JBLU) proposed acquisition of Spirit Airlines (OTC:FLYYQ) on antitrust grounds in 2024, speculation has grown that JetBlue itself could become a consolidation target as it navigates a multiyear turnaround.
Analysts, however, expect the proposed UAL-AAL merger to encounter significant regulatory obstacles. Antitrust lawyer Seth Bloom told Reuters that the deal is unlikely to pass regulators, even under a more lenient administration, as it could increase airlines’ pricing power and hurt consumers.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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