What a United-American merger would mean for consumers

When the Trump administration took office last year, plenty of airline industry insiders thought the next wave of mergers could be coming.

Few, however, had a marriage of American Airlines and United Airlines — two of the nation’s largest carriers — on their bingo card.

But then came Monday evening, when Bloomberg reported United CEO Scott Kirby had at least floated the idea to top lawmakers in Washington, D.C.

Could it actually happen?

It would certainly be a long shot, since any such tie-up would — at least under normal circumstances — draw regulatory scrutiny of the highest order.

“I wouldn’t put all that much credence into this actually happening, because it is so outlandish,” Florian Ederer, an antitrust expert studying the airline industry, told TPG.

Still, the headlines this week have rightly left frequent flyers wondering what a merger between two of America’s biggest airlines could look like, and what it would mean for consumers.

American and United merger? It’s a long shot

To be clear, we may already be getting ahead of ourselves.

At present, no merger deal between United and American has been formally announced, and neither airline is commenting on the rumors.

There could be financial incentive, to be sure: American certainly has trailed United in financial performance, of late. United and Delta Air Lines have accounted for the bulk of the industry’s profits in recent years.

But even if the two carriers reached a deal to combine forces, there would be huge obstacles to overcome.

Read more: Is airline merger mania back? That’s the question as United-American rumors swirl

Steep regulatory hurdles

Any major airline merger requires regulatory approval, and a merger of two of the nation’s largest airlines would raise significant antitrust concerns.

After all, the U.S. airline industry has already gone through waves of consolidation that have left our airports dominated by four major carriers: American, Delta, United and Southwest Airlines.

Four in 10 flights that took off in America last year were operated by American or United (and their regional subsidiaries), according to data from aviation analytics firm Cirium.

The dominance of a combined United and American could be a tough sell even in the more relaxed regulatory landscape ushered in by President Donald Trump’s return to office, some experts believe.

“I think this is a non-starter,” Ederer, who serves on the faculty at Boston University’s Questrom School of Business, said. “Even in the Trump administration, this would be looked upon as being absurd.”

Lawmakers react

Already, too, we’ve seen bipartisan backlash on Capitol Hill.

“That’s gonna be a no,” Sen. Ruben Gallego, D-Ariz., posted on social media, reacting to this week’s reports.

“This is one of the most tone-deaf acts of corporate aggression I’ve ever seen,” Sen. Mike Lee, R-Utah, added.

Ok … but what if it did happen?

But — suspend your disbelief if you must — let’s say this blockbuster merger did happen.

The tie-up of two of the nation’s legacy carriers would raise a myriad of concerns for frequent flyers.

In a video posted Tuesday, TPG founder Brian Kelly warned any such deal would be “catastrophic” to consumers.

Consumer concerns

Historically, less competition among airlines has led to higher airfares.

We should also note, in a world where airline loyalty programs are front and center for consumers, it’s a likely bet you’d eventually see mileage devaluations, too.

Beyond that, the competitive nature of today’s airline industry has fueled a proverbial arms race among major carriers: They have raced, in recent years, to upgrade seats, technology and airport amenities like lounges — all in a push to woo and keep loyal customers.

Among those going tit for tat? American and United.

“They compete aggressively for consumers … they have overlap of the various routes, they tend to be similar in terms of pricing, and it would eliminate two very obvious head-to-head competitors,” Ederer said. “So I think this would be really a loss for consumers.”

Major impacts likely at big hub airports

On a more practical level, any approved tie-up between the carriers would likely lead to asset divestitures, with some of the most visible likely to involve gate space or takeoff and landing rights at some of the most congested U.S. airports.

American and United both operate hubs (and compete relentlessly) at Chicago’s O’Hare International Airport. They also both call Los Angeles International Airport (LAX) a hub.

Plus, both carriers have cross-town hubs in the New York City and Washington, D.C., areas.

Would some hubs have to be shut down in a merger deal?

Speaking last week on CNBC, Transportation Secretary Sean Duffy acknowledged that any major airline merger may require carriers to “peel off” some larger assets, while also acknowledging the administration would have to “look at” any deal.

A merger like this could also conceivably draw legal action at the state level, and draw scrutiny in some international markets the airlines serve, too.

Could the next big wave of airline mergers be here?

Of course, in that same CNBC interview, Duffy also said Trump “loves to see big deals happen.”

At the time, many industry pundits suspected that it could open the door to a United merger with JetBlue, which is reportedly exploring tie-ups with a variety of carriers.

Or, perhaps, it could lead budget rivals Frontier Airlines and Spirit Airlines to ink a deal after years of merger discussions.

But even after decades of consolidation have left the U.S. airline industry with a small handful of dominant carriers, an American-United deal would be the merger of all mergers — and result in a mega-carrier roughly twice the size of Delta.

Do you think Atlanta would take that sitting down?

It’s not hard to envision such a move triggering additional corporate deals that would, in the end, leave consumers with a far shorter list of airlines to choose from when booking flights.

Bottom line

Again, though, we’re getting ahead of ourselves.

For now, it remains wholly unclear whether United will actually attempt to acquire American — or whether it’ll instead make a run at acquiring a smaller competitor.

Even more uncertain is whether a merger of this magnitude would have support in Washington, D.C.

Then again, this is 2026.

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