United Airlines CEO Scott Kirby is still talking about buying American Airlines, and continued to give remarks advocating for it at the IATA annual general meeting in Rio de Janeiro, Brazil.
He pitched the idea to President Trump, after ingratiating himself within MAGA by donating $1 million to the President’s inauguration, defending Trump’s tariffs, and going on Deputy Chief of Staff Stephen Miller’s wife’s podcast. The argument was a mercantilist one for a single great American airline.
There’s some view that this could sway the executive branch on antitrust, but that’s hardly the only competition barrier. State attorneys general, private antitrust enforcement suits, and foreign governments all would get bites at the apple. A future administration could seek to unwind the deal as well.
American Airlines for its part rejected the tie-up, and called it anticompetitive. That would be a problem in any future antitrust action.
Six weeks ago, Kirby sent out a broad public email saying that the merger idea was dead but that it would have been great, and continuing to argue for it. It was a strange idea unless he was negging the American Airlines board in public, trying still to get a deal done.
Since that message, United Airlines has said they’re in the market to buy assets. He repeated that mantra at the international airline trade group’s meeting in Brazil.
“I think consolidation is unlikely for United.”
“That doesn’t mean we won’t still be in the market to buy assets, but consolidation is a low probability.”
Most of the focus of Kirby’s remarks have been on the problems created by American Airlines calling a deal anticompetitive, but he’s also made clear that if American Airlines would (or were pressured to) look more favorably on it, things could be resurrected.
“You can’t have the management team on record publicly saying it was anti-competitive,” Kirby said.
Asked whether United had given up on American or could return to the idea later, Kirby repeatedly said any deal would require “a willing partner.”
Kirby says everything is poised to be put place for a deal except a willingness of American Airlines board and management to go along with it.
“We would need the unions, we need the customers, the shareholders, the regulators, and the management team.”
“I think we can get four of those five, but we’ve got to have the fifth one, which is the management team, and we don’t have that clearly, so we can’t get it done without them.”
Kirby spoke as though a merger wouldn’t happen, because United won’t chase a deal that’s opposed by American Airlines management. But he continued pitching the deal’s merits.
His key formulation is his “five constituencies” test of unions, customers, shareholders, regulators, management. He claims he can get four and that American management is the missing fifth. That’s a clever way to keep pressure on American Airlines CEO Robert Isom and his board while pretending the matter is practically closed.
Former British Airways boss and IATA’s Director General Willie Walsh, though, dismissed the prospect.
“I don’t think that’s going to happen. I think the regulatory hurdles would be very significant. I don’t know whether that was a genuine effort to pursue consolidation or Scott just trying to stir up some media.”
Walsh says things he probably shouldn’t say, but clearly the idea itself seems insane. But it’s no accident that Kirby is still talking about it. He still wants it. And he’s trying to keep the conversation for it going.
“after ingratiating himself…”
Oh, so, a normal Monday for Kirby…
Not going to happen. I’m not sure why he keeps blabbering on about it.
@George Romey — Uh, probably because our economy now runs on hype, attention, and grifting, instead of making and delivering quality products and services. (Or, just blame trans brown immigrants, like you usually do.)
*puts an earthworm on the hook, holds the line with thumb, pulls the rod back, launches it forward while releasing*
“And now, we wait…”
*basks in the morning sun*
South Korea merged their two biggest airlines. The US can as well, and destroy the utter evil that is Delta in the process.
Maybe it’s a double fake – he actually likes having Isom as a punching bag at this point, knows AA is no threat as long as Isom is in charge, and is psychologically boxing AA’s board into keeping Isom in place because a change of management might be seen as a willingness on AA’s part to explore a deal with UA? (Or at least it would be vague for a little while causing a spike in UA’s stock price when Isom is retired).
Eh, probably just hubris.
“His key formulation is his “five constituencies” test of unions, customers, shareholders, regulators, management.”
Frankly, I doubt he could get more than two of the five. Maybe shareholders at the right price. Maybe unions with the right deal. I cannot see the other three.
Let’s see any individual one of these bozos string together just five years of profitability from running an airline, not buoyed by one-time special benefits, card deals from banks, other M&A, etc. Let’s watch them run *their actual airlines* – passengers and cargo, flying them around – consistently and profitably for more than a quarter or two at a time. Then maybe we can consider further consolidation. but they can’t.
Kirby has only one thing in mind, Control. He wants sole control over the flights in and out of ORD. He thought he could bully the Mayor and Governor into handing it to him, but was not quite as successful as he thought. He has been bullying American for years and sees himself as the only Airline CEO who knows anything about the Industry, and the only one who could successfully operate an Airline. And if he were to be successful in stealing American, then what? Will he go after Delta?