No, United Won’t Merge With American, But Scott Kirby Is An Expert Troller
Apparently, United CEO Scott Kirby floated the idea of buying American in a February meeting with President Trump.
Scott Kirby and Doug Parker teamed up at America West in the 1990s and reshaped that airline as a low-cost carrier. They merged with USAirways and continued the race to the bottom there, even changing its ticker symbol to LCC (low-cost carrier).
The duo next took over American, which has underperformed since merging with USAirways dba AmericaWest.
Mr. Kirby was heir apparent to lead American when Mr. Parker retired, but was shown the door instead.
He jumped ship to become President at United in 2016, and then CEO in 2020.
He has repositioned United as a premium carrier and that was worked out well, though he’s still happy to continue the race to the bottom.
Mr. Kirby never misses an opportunity to dunk on American. He has stated that there is only room for 2 premium carriers in the US (Delta and United) and that American is being left behind. He also predicted that American would have to close down its Chicago hub and vowed a fight to the death for market share there.
I’m not going to say an American-United can’t happen, but I’d sooner expect Denmark to sell Greenland to President Trump.
There are only 3 major network carriers remaining in the US, and an American-United merger would create a behemoth that would wreak havoc with the free market. It would have no airline that could come close to competing with it and would have near monopolistic pricing power. It would also dominate key markets such as Chicago, Los Angeles, New York, and Washington DC.
Even in an M&A friendly administration, it’s hard to see that getting approval.
My take is that this is just more of the same Kirby trolling American, which he loves to do.
I suppose it can also be a bargaining chip with JetBlue. That airline wants to be bought and put out of its misery, but is asking a steep price. A merger with United would be a very good fit and should pass regulatory scrutiny. If United has other merger options, perhaps JetBlue will lower its asking price? Or will this suggestion help make a JetBlue combination an easier regulatory hurdle?
What do you think of Mr. Kirby suggesting that United should buy American?
