Aviation watchdog JonNYC flags comments from J.P. Morgan’s Jamie Baker that there’s a good chance United Airlines buys JetBlue and that more broadly we could see more airline consolidation through the Trump administration and the next administration.
To summarize, we think there could be another round of airline consolidation under the current administration (or the next one, perhaps) depending on the outcome in the rail space.
- This is mostly about JetBlue. United and JetBlue together would have the same U.S. domestic market share as American and Delta.
- That seems like the most likely tie-up, considering United’s new partnership with JetBlue where an ultimate merger has been speculated already.
- Baker notes that Alaska-JetBlue would still mean just a 7% market share, less than half of American and Delta, while Southwest-JetBlue would create a 22% market share.
Airline Mergers Hinge On Union Pacific-Norfolk Southern?
A signal that Baker flags for whether airline mergers will get the federal green light is the outcome in Union Pacific’s proposed acquisition of Norfolk Southern in an $85 billion tie-up that would create a single “transcontinental” freight railroad with over 50,000 route miles across 43 states.
The federal government’s review comes through the Surface Transportation Board. Review will likely take all of 2027. Their ‘major rail merger’ rule has required showing that a deal will enhance competition rather than merely preserving it.
Chemical producers oppose the deal, arguign that it would reduce competition, raise freight rates, and degrade service. One major labor union endorsed the deal after getting job guarantees.
If the Trump administration allows Union Pacific, the thinking goes, they’ll allow airline consolidation.
Will Spirit Airlines Be Acquired?
A Spirit deal might come sooner than JetBlue, since the bar would presumably be lower given Spirit’s second bankruptcy. Plus, the Trump administration would get to blame the Biden administration for Spirit’s plight – Biden’s DOJ blocked JetBlue’s acquisition of Spirit, so they can say they’re swooping in to approve a deal to save the airline and its remaining workers from a plight imposed upon them by his predecessor.
This isn’t, then, just a question of whether the Trump administration will be permissive with mergers. It’s the normal special case of an airline on the brink, where it’s easier to get a merger approved, plus the opportunity to hand the Trump administration an opportunity for trolling.
If a Spirit deal happens, the best time is proximate to its bankruptcy rather than waiting for it to emerge from bankruptcy. Go through the bankruptcy process to reject financial obligations, and exit bankruptcy with the deal.
There’s Short One-To-Two Year Window For Airline Mergers
Baker says airline consolidation could run into the next administration, but there are reasons to think that post-Trump it could be a tougher environment.
- If a Democrat wins in 2028, we presumably move back towards mainstream Democrat views on antitrust which were reflected during the Biden administration (and which opposed the American-JetBlue and JetBlue-Spirit deals).
- If a Republican wins in 2028, by far the most likely candidate is J.D. Vance (currently over 50% shot of the nomination in betting markets vs. 7.5% for Marco Rubio). And Vance would be far closer to current Democratic views on antitrust than traditional Republican ones.
Vance has explicitly praised Lina Khan – the intellectual architect of aggressive modern antitrust enforcement – and criticized the power of Big Tech saying they have too much power, that they’ve distorted democratic discourse, and called for breaking up Google. And he talks about antitrust less in traditional consumer-welfare and efficiency language and more in terms of workers, competition for smaller firms, and democratic influence. Put another way, he’s closer to the national conservative economic agenda focused on market concentration, trade concents and a belief that large corporations undermine ‘middle America’.”
Any deals really seem to have a window of 2026 and 2027 to get done, since anything in 2028 risks review falling into the next administration. It took 10 months from deal announcement to close for both the Alaska-Hawaiian and American Airlines-US Airways mergers. It took 9 months for Alaska-Virgin America.
Spirit would likely happen in 2026, but if it’s correct that other deals would wait for the outcome of antitrust review in the rail sector, then the window is 2027 for airline consolidation. That’s when United should make its move on JetBlue, but expect other airline to want to seize that same opportunity.
JetBlue is attractive to Alaska, and Alaska should be far enough along with its Hawaiian integration to consider another deal (although this will represent both operational and balance sheet risk). And American, while less able to afford JetBlue, should see them as their last opportunity to gain sufficient scale in New York to compete with Delta and United.
Assuming UA can create a satisfactory answer to the EWR/JFK concern to the DOJ I see that hookup. Outside chance could be Southwest. I don’t see JetBlue surviving as a standalone.
Unless Frontier decides to buy the slimmed down version of Spirit I see no one with an interest. It’s a dumpster fire. Other airlines can always buy planes, gates, routes out of a liquidation sale.
Great time to allow foreign ownership of US commercial airlines. That would inject, not just capital, but competition to the cozy domestic oligopoly.
UA a la Kirby has been polishing 47’s knob since he returned to office. They’ll get what they want. I’m sure a nice donation to the Ballroom Fund will help clear the runway.
Hopefully, the same Attorneys General (Letitia James (NY), Rob Bonta (CA) in Boston right now suing to keep food stamps going will sue again when these large, high fare airlines are ready to gobble up cheaper airlines and raise fares. Most of the federal judges in that city were appointed by Biden and Obama. A judge in Boston crushed the JetBlue/Spirit deal. Hope they keep up the good work.
A forced merger of AA and B6 to keep AA from needing a bailout and the “too big to fail” mindset.
First, everyone here needs to understand that investment analysts love to see mergers and acquisitions because they invariably force up the stock price. JBLU stock is lower than it was when it was first issued and continues to decline.
Second, the proposed railroad merger in the US is an end on end merger – combining two airlines from different regions of the country to create a nationwide system. The closest end on end airline merger was Delta-Northwest which resulted in no divestiture requirements because Delta and Northwest had no overlap other than on their hub to hub routes.
JBLU – UAL, as some have noted, have significant overlap in NYC; UA and CO before have spent decades telling us that EWR is NYC; they can’t pretend it isn’t now because everyone knows it is one of the 3 NYC airport – the fact that it serves a different part of NYC doesn’t make it any less of a NYC airport. Even though UA has pulled back to about parity with DL in NYC post EWR 2025 meltdown disaster, there is no planet on which DL or UA would be allowed to acquire any airline that significantly increases their NYC size.
And third, JBLU has 40% of the net debt that much larger UAL has. All of those slots are not very economical when they come with that much debt.
And, finally, people fixate with higher cost carriers taking over lower cost carriers but the DOJ has repeatedly said that is the worst thing for competition and has repeatedly blocked it – via the NEA w/ AA/B6 and B6/NK.
There is a higher likelihood that DL will be able to acquire WN – with which it has very little overlap – than UA will be allowed to acquire B6.
If anyone thinks UA’s and B6’s teams haven’t been working on a full merger behind the hoopla of the marketing tie up, they haven’t been paying attention. I’d expect an announcement within weeks if the rail tie-up goes through.
Further mergers among major carriers would almost certainly weaken competitive discipline and allow the surviving airlines to raise fares, reduce capacity, or degrade service quality without fear of meaningful entry or expansion by rivals. The DOJ’s 2013 lawsuit to block the AA/US merger alleged the elimination of competition in more than a thousand city-pair markets and excessive concentration of takeoff and landing slots at DCA. Although that merger was eventually approved with conditions, later studies and fare analyses showed that consumer welfare did not materially improve and market power among the largest carriers only became more entrenched.
The U.S. domestic airline market is already dominated by a small group of network carriers, meaning additional mergers create few true efficiencies while raising serious risks of coordinated pricing and capacity decisions. Each successive merger removes an independent competitor capable of exerting downward pressure on fares and upward pressure on service quality. The DOJ’s recent challenge to the JetBlue–Spirit deal reflects its understanding that the efficiency claims of large carriers rarely outweigh the consumer harm caused by reduced competition. Given this history and the high barriers to entry that persist, approving further airline mergers would undermine the central purpose of antitrust law, which is to preserve competition itself and safeguard consumer welfare through open, contestable markets.
At this point, we have seen enough consolidation in the industry, and I hope no more of it occurs. Even under a second Trump administration, the odds of easy merger approval remain low, since even a business-friendly DOJ would still likely require clear and verifiable consumer benefits along with credible safeguards to ensure competition is not further weakened. Susan Athey is the Chief Economist of the Antitrust Division of the DOJ at present, and there is very strong historical evidence to support that this is likely to be her position.
Some classic TD analysis: Investment managers only want stocks to go up… I mean sure investment managers want stocks to go in the direction they say but I think you’ve forgotten about the existence of shorting.
@Tim Dunn – There’s no way to know to a certainty, but I strongly suspect the DOJ would likely still view a DL/WN merger skeptically, not because Southwest remains a classic low-fare carrier, but because it represents one of the few large competitors outside the legacy airline triopoly. Its independence serves as an institutional counterweight to the concentration of market power. For that reason, even if Southwest’s economic identity has evolved, its symbolic and structural role as a fourth major network alternative would still make any merger attempt politically and regulatory fraught, though for different reasons than in the past. And if Southwest were to go bankrupt, regulators would almost certainly favor an orderly, piecemeal sale of its assets rather than allowing a wholesale acquisition. That approach would preserve competitive balance by dispersing valuable gates, slots, and routes among multiple carriers instead of further consolidating them under a single dominant airline. Just my (speculative) two cents.
It’s okay everyone.
Tim explained why he is the smartest guy in the room and why Delta/NW was the greatest merger ever.
Delta is a good airline, no doubt. But the only airline that wins by keeping B6 independent and possibly disappearing is DELTA.
B6 is a staunch competitor with a on par product, but they don’t get to compete on a level playing field because of the mega mergers.
The answer is not to keep B6 independent.
Cant wait for AFA at Delta!!!
100%. Anything goes right now (and only while this fraudster is in-charge), so long as you stay on our Dear Leader’s good side (pay your gratuities!) I’m not even kidding; M&As, insider trading, market manipulation, outright corruption, etc. All gas, no breaks, dawg.
A DL/WN merger would create some interesting issues for DL, such as what to do with hubs with little international capability, and overlap with existing hubs. Midway and Love Field won’t support transoceanic flights, Midway is too close to both Detroit and Minneapolis/St Paul to be an attractive hub. Love Field and new gates in Austin might conflict. Denver and Salt Lake are too close together (in western US distance and population) to keep both as hubs. I think any of the big 3 would all have some similar issues with digesting all of Southwest.
If United and JetBlue merge, then Alaska is on the table for either Delta or American. UA/B6 moves the needle.
Personally, I think the only merger that makes sense is WN/B6 since WN is weak in the NE and B6 doesn’t have much marketshare outside the NE. Eventually they could roll Alaska into that combined company.
While I would love to see an Alaska/JetBlue merger, it still leaves them too small to compete nationally especially with no viable mid-continent hub or much internationally flying. They would need to fill the gap.
From 1963 to 1979, Love Field was host to nonstop London and Frankfurt flights, as well as HNL daily nonstops. The runways are sufficient to support heavy aircraft. Now that the Wright Amendment is no longer in effect, all it would really take to reinstitute international flights is the addition of a CPB arrivals facility, for which there is ample space.
@ Tim — You need ro understand that DLs days at the top are numbered
Anti-trust legislation is another example of economically ignorant politicians/bureaucrats inserting themselves into the marketplace, and there is no intelligent theory that explains how private monopoly power could exist and harm consumer welfare.
Gene,
you clearly wish – but no one, including UA, is making a credible run at DL.
DL is, however, making a credible run at UA’s Pacific network which is their crown jewel.
Mike,
I do agree with you and your logic; I post that DL and WN have as good of a chance of getting approved as B6 and UA do because there are so many people that believe that pretending that EWR is not part of NYC or that shelling out gazillions of bucks is enough to get a merger approved.
DL has virtually no network overlap with WN. To think that total system size between B6 and UA will overcome overlap in NYC is the height of the denial – which is not a river in Egypt.
@ Mike P – It is incorrect to claim that monopoly power cannot exist or that it poses no threat to consumer welfare. Even in the absence of government-created barriers, markets with strong network effects or high switching costs (e.g. social media, online search, and app distribution) can sustain dominant firms that entrench themselves against competition. Google’s control of search advertising, Facebook’s dominance in social networking, and Microsoft’s past tying of Windows and Internet Explorer each illustrate how private monopoly power can persist and distort consumer choice. History offers earlier examples as well, from Standard Oil’s control over refining and distribution to AT&T’s century-long grip on telecommunications. In each case, market power allowed firms to limit innovation or extract rents in ways that harmed efficiency and slowed progress.
The solution, however, is not reflexive punishment of success but careful, evidence-based enforcement rooted in consumer welfare. The breakup of AT&T, for example, paved the way for lower prices and rapid advances in telecommunications, while the antitrust scrutiny of Microsoft helped open space for new entrants in software and online services. Properly applied, antitrust law preserves the conditions for competition rather than penalizing scale itself. Far from representing bureaucratic meddling, it functions as a safeguard against the stagnation and coercion that unchecked monopoly can produce, ensuring that markets remain open, innovative, and accountable to consumers.
“The solution, however, is not reflexive punishment of success but careful, evidence-based enforcement rooted in consumer welfare.”
Well said, @Mike Hunt. We may not agree on everything, but at least you’re starting from a reasonable premise. We need common sense guardrails.
On the other hand, @Mike P, yet again, promotes anarcho-libertarianism, if not full-on ‘sovereign citizen’ nonsense, and that is simply no way to run a modern society; if he had his way, we’d likely end up with some form of oligarchic feudalism.
Wrong, Mike! For a monopoly to exist in a free market, there must be a barrier to entry, which can only be imposed by government force. Remember, there are only two options: the market or the government. There is no third choice. When people advocate for government control, they’re advocating for the use of force to achieve some perceived outcome. I prefer voluntary exchange over government force/control.
Also, the Standard Oil example is a myth, and AT&T in its infancy was the product of government intervention. In other words, their monopoly was obtained through government regulations and “sweetheart” deals. Simply put, when access to the marketplace is unrestricted, the formation of a monopoly is next to impossible.
https://fee.org/articles/the-myth-that-standard-oil-was-a-predatory-monopoly/
@Mike P – While it is correct that government intervention can create or entrench monopoly power, it is simply false to claim that private monopolies cannot exist without it. Network effects, economies of scale, and strategic exclusion can all create durable dominance that harms consumers even in an open market. Firms such as De Beers, which controlled global diamond supply through private contracts, or Ticketmaster, which leverages exclusive venue agreements to impose high fees, demonstrate how private concentration can restrict competition and raise prices without direct government barriers. Likewise, dominant digital platforms like Facebook and Google have maintained control through user lock-in and data advantages that make meaningful entry nearly impossible. These outcomes reduce consumer welfare by limiting choice and innovation, regardless of whether the government created the structure.
The historical record also undermines the idea that Standard Oil and AT&T were government inventions rather than examples of how private market forces can evolve into concentrated control. Standard Oil exploited scale economies, secret shipping rebates, and control over pipelines to dominate refining long before regulatory protection existed, and AT&T’s market power was reinforced, not created, by later regulation. The lesson is that monopoly can arise from either public policy or private conduct, and both require vigilance. Antitrust policy, properly grounded in consumer welfare, exists not to punish success but to preserve the competitive conditions that make voluntary exchange meaningful in the first place.
Agree to disagree, but as the article I posted indicates, there exists no evidence in the historical record to back your position.
While I would rather not have the top three airlines merge with anyone to get even bigger, it was not anti competition for the sixth and seventh largest airlines to merge to create the fifth largest airline.
The FEE article you cited makes an appealing case for laissez-faire purity, but it omits key evidence from the historical and economic record. It argues that Standard Oil’s efficiency gains and falling kerosene prices prove there was no consumer harm, yet that interpretation ignores how the company achieved and maintained its dominance. Standard Oil secured secret rebates from railroads, controlled nearly every major pipeline, and used selective pricing to drive smaller refiners out before buying them at distressed values. Those actions restricted market access rather than enhancing it. The resulting 90-plus percent market share cannot be explained by efficiency alone. Courts and economic historians, including those sympathetic to markets, have found credible evidence of exclusionary behavior that justified antitrust scrutiny.
The claim that all monopolies require government force also collapses under more recent examples. De Beers controlled diamond supply for decades through private contracts, stockpiling, and intimidation, not through legislation. Ticketmaster’s grip on live events came from exclusive venue agreements, not regulation. Google’s command of search advertising rests on data dominance and network effects that make entry nearly impossible even without legal barriers. These cases illustrate that private market dynamics can yield durable monopoly power that harms consumer welfare. To acknowledge this is not to reject free enterprise but to insist that true market competition requires open access, not control by entrenched incumbents.
For the record, I’m a strong admirer of FEE overall, though no organization gets it right all the time. In this case, the author of the article you shared, David Weinberger, appears to have no formal training in microeconomics. To be clear, a degree is not the sole measure of expertise, but if given the choice between a surgeon educated in medical school and one who taught herself, I’d generally place greater confidence in the former. The same is true here.
But sure, we can agree to disagree. Thanks for the exchange.
The theory that monopolies cannot form in a free market is theoretical since there has never been a free market. (studied antitrust under Richard Posner)
There’s simply been too much consolidation in the U.S. airline industry. The only merger that makes sense in the current situation would be one that would create a competitor in the domestic market that could stand up to The Big 3: that’s JetBlue and Alaska. JetBlue merging with United would be madness: United already has an international network that outstrips AA and DL by an order of magnitude; The last thing we need to do is hand even more power to United and turn NYC into an effective duopoly among domestic carriers. United already has a death grip on Newark so adding lots of slots in JFK would be a disaster for the flying public.
@Mike Hunt, @Jack the ladd — Nice overview of conservative economic and legal theory, fellas. The Chicago School and the Federalist Society would applaud you for your service above. Thank you for sticking to empirical evidence, and defanging @Mike P’s Austrian School nonsense. Perhaps, this pending Recession/Depression will give us another chance to ‘test out’ a few theories. You sure I can’t convince you to try more Keynesian, or even some New Brandeis, approaches to anti-trust? I presume Lina Khan and Tim Wu are thanking me right now, but they probably don’t know or care about VFTW at all. Psh.
Jet Blue and Alaska: Alaska “Proudly All Boeing” Airlines would have a fine time absorbing Jet Blue’s large all-Airbus fleet.On the other hand,, United already has those.
@Mike P: Good points.