Airline mega-merger story is all about Trump
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United Airlines CEO Scott Kirby floated the idea of a merger with American Airlines while meeting with President Trump last month, according to multiple reports.
Why it matters: Corporate America has concluded that federal antitrust approval now comes from the top.
The big picture: Airline mergers must be approved by both the Justice Department and Transportation Department.
- Many of DOJ's top antitrust officials and prosecutors have been forced out and/or resigned this year, after balking at proposed settlements in cases like Live Nation and its Ticketmaster subsidiary.
- The new model for lobbyists has been to go directly to senior DOJ leadership or, if possible, to Trump himself.
- It's a sea change for how big business is done, including from Trump's first term, and may be contributing to this year's 53% increase in U.S. merger and acquisition activity.
Zoom in: United and American are already among America's largest airlines. A merger would give them more than a 34% market share, easily topping current leader Delta (17.8%).
- Neither United nor American has commented on Kirby's comments to Trump, nor are there indications of active deal talks.
- Shares of both companies rose significantly on Tuesday.
Catch up quick: DOJ under President Biden blocked JetBlue from acquiring Spirit Airlines in 2023, successfully arguing it would lead to higher prices and reduced choice — and their combined market share is only 8%. JetBlue is now reportedly seeking out a new merger partner.
- Transportation Secretary Sean Duffy last week said that he thinks there's "room" for some airline tie-ups, without getting into specific names.
The bottom line: It's unclear how serious United is about buying American, or how Trump reacted to the idea. What is clear, however, is that United knew where to make its pitch.
