Guys, either Scott Kirby is losing his mind, or the Trump administration likes “big deals” even more than we already knew.
In this post:
Scott Kirby is pitching United buying American?
Bloomberg is reporting that United CEO Scott Kirby has pitched the idea of United acquiring American to senior members of the Trump administration. Per the report:
Kirby has pitched the idea to senior government officials, though it’s unclear if any overtures have since been made or if an actual process is underway to explore a deal, according to the people, who asked not to be identified because the conversations are private.
Jon Ostrower from The Air Current, also a very reliable source, confirms this news is accurate, and suggests that there has been talk of this for around a week now.
For context, in recent times there have been lots of rumors about possible airline consolidation. The wisdom seems to be that if there is going to be any additional consolidation in the airline industry, now is the ideal time in terms of getting regulatory approval (before the midterms).
The common belief has been that some sort of deal with JetBlue is most likely, both since JetBlue is looking for a merger partner, and also since Kirby has been very vocal about his interest in JetBlue. Delta’s CEO has made it clear he thinks we’ll see multiple mergers, and even the Transportation Secretary has said he’s generally in favor of consolidation. So to see the suggestion that two of the country’s three biggest airlines could merge is on a completely different level.
Let me of course emphasize that this is just a report, and that it’s anyone’s guess if any attempt is even made here. The report only suggests that Kirby has floated the idea with some senior Trump officials, and one wonders how serious this proposal even is (“wouldn’t it be funny if we bought American, haha?”).
How do we rationalize an American & United merger?
Kirby is a smart guy, and certainly also ambitious and a bit arrogant. I generally think he has a really good pulse on the industry… so I’m really surprised to see his take here.
I guess on the most basic level, I wonder if Kirby is actually serious? Does he really think there’s any chance on earth that an American and United merger would be approved? I guess under Trump one never knows, but that just seems wild to me:
- I don’t generally think consolidation in the airline industry is evil, as long as it allows airlines to scale to the point where they can fully monetize their loyalty program (whereby credit card companies are basically subsidizing airline ticket prices)
- American and United are both at scale when it comes to that, so I feel confident that a deal like this wouldn’t be in the public interest
So is there even a 1% chance that something like this would get regulatory approval? I almost feel like Kirby can’t really believe this, in which case I wonder if he might be playing 4D chess here, and there’s some angle I’m missing. Is there some incentive that he has to even create these kinds of rumors? Is it to make a JetBlue merger look small and insignificant by comparison, or…?
Or is Kirby actually this delusional? We know he used to work at American, and he loves to take revenge on the airline any way that he can. He has also gone on the record as saying that American is cooked, and can’t recover from its mistake. So from that perspective, I’m confident that nothing would bring him more joy than taking over American and making the brand disappear. But… also… c’mon.
Bottom line
United CEO Scott Kirby has reportedly floated the concept of a merger with American with Trump administration officials. I think many wondered how much regulatory scrutiny a JetBlue merger would face, but an American merger would be on a completely different level. I don’t even know what to make of this.
What do you make of Kirby’s wild merger concept?
It’s almost comical. The airline industry is already pretty much a monopoly based on which city you live in. The majority of cities are dominated by one airline making competition theoretical. So many people quipping about how one airline (usually Delta) is “better” than another in some regard. It’s all BS. They are all the same and they all suck.
United ready to take the baton from Ticketmaster/Live Nation
@lucky : They should name the combined entity -
American Ego
Think Kirby is pulling your chain, Ben. And doing at expense of Isom. And making it easier for UA to actually buy Jet Blue.
This is certainly bad for the industry. However, suppose that he's serious and that trumpettes allow this to go through (which they likely would). Ignoring the fact that it's likely to get unwound by a future administration because it is SOOO anti competitive. If you're Delta, do you fight UA for AA or, do you go upmarket and acquire AS - who if UA and AA merge would likely be amenable - and play to...
This is certainly bad for the industry. However, suppose that he's serious and that trumpettes allow this to go through (which they likely would). Ignoring the fact that it's likely to get unwound by a future administration because it is SOOO anti competitive. If you're Delta, do you fight UA for AA or, do you go upmarket and acquire AS - who if UA and AA merge would likely be amenable - and play to your mutual strengths of culture and premium prices and make hay while UA tries to digest AA. I know what I'd do if I were Ed Bastian. I'd let UA choke on AA and spend some quality time making friends in Seattle.
Then... what happens to oneworld? Can the alliance survive without a US carrier? Or does it fall apart and get divvied up between the other two alliances. There would certainly be global effects.
Interesting. If there's even a kernel of truth I'm getting out the popcorn.
Even if this is a rumor as crazy as Trump, the reality is that AA is a troubled airline. Its management is clearly failing (compared to DL and UA) so shareholders have to be interested in some sort of merger or partnership, no?
I'm pretty sure it is a ploy to buy jetBlue!
Delta, the only carrier that has released its 1st quarter earnings, said that it is quite open to consolidation in the US airline industry and reminded everyone that DL led consolidation during the great recession with the NW merger.
UA might only want B6 but DL is not going to be limited by whether UA meets its objectives or not.
It is entirely possible that DL could make a merger proposal with AA or WN,...
Delta, the only carrier that has released its 1st quarter earnings, said that it is quite open to consolidation in the US airline industry and reminded everyone that DL led consolidation during the great recession with the NW merger.
UA might only want B6 but DL is not going to be limited by whether UA meets its objectives or not.
It is entirely possible that DL could make a merger proposal with AA or WN, both of which have things DL needs (like a large Texas presence) while DL has things they need. Yes, you have to spin off a few things from any combination of merged airlines - but DL did not express its interest in consolidation to blow smoke up AA's backdoor.
UA runs the risk of going after B6 while DL is interested in a much larger and more significant target while other airlines could salivate over things that DL (or UA) can't digest from other airlines.
Kirby and his family still live in Dallas. He’s really just tired of commuting. Ironically he commutes a lot on AA.
We need break up of JV or alliances not bigger airlines, I rather see air Asia fly in US before US buying AA.
I tend to believe it is to make a merger with Jet Blue easier to sell. The proposal is more like throwing a stone in a pond and looking at the ripples. American has so many problems, it would create a total mess for UAL management to deal with. Jet Blue makes more sense as UAL is lacking on domestic routes. It is crazy that JBLU’s merger with Spirit was not allowed but better for JBLU in the long run I suspect.
they need to break up the big three. No more mergers.
No way in hell this gets foreign regulatory approval.
"We'll go from the Big 3 to the Tremendous Two. It'll be so beautiful, the likes of which have never been seen before."
we're actually on the way to 5 global carriers; AS is moving that direction but needs more hubs outside of the PNW and west coast.
WN is a major domestic beast but has no international operations.
We don't need 5 global carriers. We can easily collapse the LCC sector into 2 of the remaining big 3 plus WN as a new global carrier and still have 4 global US carriers.
If WN merges...
we're actually on the way to 5 global carriers; AS is moving that direction but needs more hubs outside of the PNW and west coast.
WN is a major domestic beast but has no international operations.
We don't need 5 global carriers. We can easily collapse the LCC sector into 2 of the remaining big 3 plus WN as a new global carrier and still have 4 global US carriers.
If WN merges with one of the existing big 3 carriers - DL has the least overlap with WN - then you still have 3 global carriers.
I can absolutely assure you that there are diagrams of what the future industry could look like being pulled together in executive offices at multiple airlines.
Hi Tim,
"no international operations"
Currently WN flies to 10-11 other countries.
Correct. But no transoceanic other than Hawaii widebody ops.
WN’s revenue is about 98% domestic
I want there to be two global carriers: United/American and Southwest/Alaska. I want Delta to be totally destroyed, with, as Alfred Jarry put it, even the ruins destroyed, with Atlanta in a state that would have made Sherman jealous. And why do I want Delta destroyed? You're a big reason for it, Timbits. I want to see you suffer.
the sad reality for you is that DL is likely to be the last to fail if only for economic turns.
the rest is indication that you are just off your meds
What did Delta and SkyTeam do to you ORD ? I am quite currious.
Pick ANY industry... consolidation results in higher prices and poorer services. Monopolies and oligopolies consistently abuse the public through unregulated market power. I would not be surprised to see such a scheme approved. In the rail industry Union Pacific is seeking approval to buy Norfolk Southern which creates a company controlling 50% of the industry (there are only 4 major railroads left in the US). Ever wonder why the US has third world rail passenger...
Pick ANY industry... consolidation results in higher prices and poorer services. Monopolies and oligopolies consistently abuse the public through unregulated market power. I would not be surprised to see such a scheme approved. In the rail industry Union Pacific is seeking approval to buy Norfolk Southern which creates a company controlling 50% of the industry (there are only 4 major railroads left in the US). Ever wonder why the US has third world rail passenger service? Look no further than industry consolidation, deregulation and government complicity in milking and bilking the public. Short term gains, no long term vision.
Union Pacific and Norfolk do not administer passenger rail service anymore, so that has nothing to do with why rail service is bad in the US. It's bad because of poor investments in Amtrak and this countries disdain for train service like Europe and Asia.
@Alonzo
The freight carriers actually do have a lot to do with it, because they are required by law to give priority to Amtrak services as part of the deregulation deal that allowed them to shed their own passenger services. They don't do this in practice, and running longer and longer trains coupled with deferred maintenance on tracks, right-of-ways, and locomotives plays absolute hell with Amtrak's medium and long-distance reliability and even causes issues...
@Alonzo
The freight carriers actually do have a lot to do with it, because they are required by law to give priority to Amtrak services as part of the deregulation deal that allowed them to shed their own passenger services. They don't do this in practice, and running longer and longer trains coupled with deferred maintenance on tracks, right-of-ways, and locomotives plays absolute hell with Amtrak's medium and long-distance reliability and even causes issues on the Northeast Corridor on occasion:
https://railroads.dot.gov/elibrary/hq-ns-2022-0305-1543
https://www.rtands.com/freight/ns-derailment-cripples-amtrak-weekend-service-on-northeast-corridor/
There was also a derailment just last month on Horseshoe Curve in Pennsylvania, which cancelled Amtrak's Pennsylvanian service until it could get cleaned up: https://www.reddit.com/r/trainwrecks/comments/1rnqf04/early_this_morning_saturday_march_7_2026_a/
And these aren't one-offs either.
Alanzo, Railroads surely influence passenger service. They directly control frequency, speed and access. CSX got a $200M ransom for deferred capital to put 2 trains between New Orleans and Mobile. This is the main reason Amtrak service is threadbare. Plus inadequate funding.
Well said. Feels like the plot of the movie Wall Street... Bluestar Airlines. Gutting companies, workers, consumers, just so a few can profit and leave others holding the bag. Friends, it was supposed to be a warning, not an aspiration. Sheesh!
Not going to happen. The endless court battles involving state suits and other airlines, particularly DL and WN would take years.
Few here are old enough to remember when UA and US tried to merge. That eventually became a cluster "duck" and the two parties walked away. This would be a colossal cluster "duck."
The US does not need 4 and potentially 5 gobal airlines. AA, DL and UA are all there. WN is on its way to become a global airline. AS is partway there.
AA, B6, NK are not financially viable.
AS has been operating at very low profitable margins and will for the next few years as it digests HA and tries to expand its global network.
It is possible to take out at least...
The US does not need 4 and potentially 5 gobal airlines. AA, DL and UA are all there. WN is on its way to become a global airline. AS is partway there.
AA, B6, NK are not financially viable.
AS has been operating at very low profitable margins and will for the next few years as it digests HA and tries to expand its global network.
It is possible to take out at least one of the current big 4 and one or more of the low cost carriers and merge them w/ the pieces of the remaining carriers and still have a ULCC and have a couple of niche smaller carriers.
but it will all require moving lots of pieces around to create stronger remaining carriers and still limit the size to around 30% market share for any one carrier - which is the amount the DOT Secretary threw out. There would likely also be limits about how big any two airlines can be in any one market. DL and UA are probably as big as they can be in NYC other than either adding a couple dozen more flights/day. AA plus UA in NYC cannot be combined.
DFW is a massively valuable and likely profitable hub. CLT is the only competitive hub to DL's massive ATL hub.
AA at MIA is unique in the industry and could be "plugged into" any other carrier.
AA at PHX and PHL could be plugged into any other carrier.
It was always naive to think that B6/UA would be the end all
My gosh, Tim, George, are you two tag-teaming, pro-corporate, anti-consumer b.s. on here and all the various travel blogs? It's nauseating. Consolidation, mergers, etc. is obviously bad for consumers and workers here. You can lie and distract all you want; lick those tasty boots. Won't change the truth.
@1990 Maybe you should give the Bernie Sanders routine a rest. No where did I say whether it's good or bad. I said it won't happen because of lawsuits or the threat of lawsuits and the concessions that would need to be made. Just like the 25 year ago UA and USAir merger agreement that fell apart.
the ironic part is that 1990 talks so much about traveling in premium cabins all while pushing socialistic ideals.
And there are no combinations of the big 4 with each other - including AA and UA - that are permissible under any modicum of consumer protection. It is doubtful that combinations of the entirety of any of the other US airlines (not the big 4 with one of the big 4 - including UA/B6) that...
the ironic part is that 1990 talks so much about traveling in premium cabins all while pushing socialistic ideals.
And there are no combinations of the big 4 with each other - including AA and UA - that are permissible under any modicum of consumer protection. It is doubtful that combinations of the entirety of any of the other US airlines (not the big 4 with one of the big 4 - including UA/B6) that would be allowed because of antitrust concerns.
It is the possibility of carving up an airline or two between multiple other airlines that could allow consolidation in the US industry.
UA/US failed because it would have further consolidated the Baltimore/Washington metro area into fewer carriers.
You need only look at the metro areas that host hubs among the big 4 and realize those are not going to be allowed - but don't need to.
DL is the only one of the big 4 that doesn't have a Chicago, Texas or Baltimore/Washington hub. UA has no SE hub. AS has nothing outside of the PNW etc.
Maybe it's a long play to get B6 (like when you needed to borrow $20 from your parents, asked for $50, and "settled" for $25), maybe he's just trolling Isom. Either way, you love to see it. Kirby's great for the industry.
You forgot the ‘/s’
A little droll wit maybe, but no sarcasm. :)
This is a classic antitrust play by United coordinated with their outside counsel (lawyers) and PR firms (that coordinate with industry journalists and influencers). Goal is to stir up how unreasonable UA/AA might be so that JetBlue looks easy and palatable.
Joe L, yup, it's clear. That's why folks like Tim and George Romey are on here. They are industry shills, or, even worse, useful idiots.
Seems logical. Of course with the outright corruption in the current administration anything is possible if you pay enough.
On the show Veep they had a term for this sort of thing - The C*ck-Thumb; basically propose something that seems drastic (cutting off the c*ck) so that the thing you actually want seems reasonable by comparison (cutting off the thumb). Kirby is hoping by pitching AA when UA goes for B6, or tries to gobble up NK’s slots and assets that those get approved.
Trump is (quite literally) insane (see today’s NYT article),...
On the show Veep they had a term for this sort of thing - The C*ck-Thumb; basically propose something that seems drastic (cutting off the c*ck) so that the thing you actually want seems reasonable by comparison (cutting off the thumb). Kirby is hoping by pitching AA when UA goes for B6, or tries to gobble up NK’s slots and assets that those get approved.
Trump is (quite literally) insane (see today’s NYT article), but the optics of approving a consumer-unfriendly merger in a midterm year are beyond even what he would tolerate. Also have to imagine DL and AS would join consumer groups to sue to stop such a thing.
I'm thinking the same thing, but this is a much better way to frame it. lol.
Yeah, luckily a war with Iran that would cause a massive increase in gas prices is out of the question in a midterm year also. Oh, wait...
Hah touché
Could this be a case of the sick donkey being saddled by the dead donkey?
Welcome back. Hadn’t seen you in a while. Were you on holiday?
Do try to keep up with the program, we have been enjoying the autumn weather in the Cape.
Sometimes the subject matter is of no interest to me and therefore I keep my own counsel. Sorry if Ben, misses the clicks.
Wine-sipping in Stellenbosch? Whale-watching at Hermanus? Picnic with the baboons at the Good Hope, or is it too windy? It's nearly always too windy there.
Been there, done all of those things and probably before you were even a twinkle in your father’s eye …. :-) However, not anymore, too many onetime tourists and touts over the holiday period.
For me it is kite surfing, lobbed out a few times (just to keep my hand in) walked the reserve to tend to the new born wildlife and socialised in Darling on the odd occasion. Not forgetting lots of braai time...
Been there, done all of those things and probably before you were even a twinkle in your father’s eye …. :-) However, not anymore, too many onetime tourists and touts over the holiday period.
For me it is kite surfing, lobbed out a few times (just to keep my hand in) walked the reserve to tend to the new born wildlife and socialised in Darling on the odd occasion. Not forgetting lots of braai time with family and friends. We rarely travel South or East of the airport anymore.
It is such a hard life being retired and enjoying oneself. But we will suffer Cap Gros next month if you insist? …. :-)
Well, I mean, directly south is a township, so I hope you didn’t get stuck there, of face any load shedding. Kite surfing is a surprise! Hope you get some malva pudding at least.
“Township” really? Do you know something which I don’t? …. Unless you are talking about Cape Town International Airport?
America United Lines has a nice ring to it for our 250th birthday under President Trump.
UAL remains “y’all.” Texas is bigger than ever!
UA is Chicago. Keep y’all antichrist in Texas
Guess you may not realize this is an opportunity for ya’ll UAL to get out of a high on crime and taxes blue state, back to the red state efficiency of Continental, without leaving the true culture of the Tulip but only the rusty slag of its deteriorating location of where it is centered presently at least.
Unfortunately, no literate or capable person would ever choose to live in Dallas-Fort Worth, which will always be a competitive disadvantage for airlines headquartered there. It's no surprise that United and Delta are beating American and Southwest...talent will always choose the coasts. Even living in Atlanta or Chicago is settling compared to the Northeast or California, but they both beat the vulgar suburbs of Texas. To put it simply--no human of value would ever live...
Unfortunately, no literate or capable person would ever choose to live in Dallas-Fort Worth, which will always be a competitive disadvantage for airlines headquartered there. It's no surprise that United and Delta are beating American and Southwest...talent will always choose the coasts. Even living in Atlanta or Chicago is settling compared to the Northeast or California, but they both beat the vulgar suburbs of Texas. To put it simply--no human of value would ever live in DFW.
With that in mind, American's best hope is for Alaska to purchase it and move the HQ to Seattle--one of the 7-8 places in the United States that actually matter.
Approve it, United acquisition of American.
Requirements:
1. DFW hub must be divested. Delta or Alaska should take it.
2. some gates at ORD must be given up. Delta, Alaska, Frontier, and Spirit should get it. It would be nice if Frontier started a focus city at ORD.
3. Allow cabotage by Singapore Airlines, EVA Air, Starlux, and China Airlines along with allowing 7th freedom service by US carriers at SIN, TPE,...
Approve it, United acquisition of American.
Requirements:
1. DFW hub must be divested. Delta or Alaska should take it.
2. some gates at ORD must be given up. Delta, Alaska, Frontier, and Spirit should get it. It would be nice if Frontier started a focus city at ORD.
3. Allow cabotage by Singapore Airlines, EVA Air, Starlux, and China Airlines along with allowing 7th freedom service by US carriers at SIN, TPE, KHH Kaohsiung Taiwan, TSA Taipei Songshan
4. (to improve chances of approval) International Business Class must be named Trump Class for at least 3 years.
No one in the WH has a clue what cabotage or 7th Freedom Service are.
this is actually really smart, they'd end up totally washing Delta, so it's a good way to spend the accumulated quid pro quo capital. RIP to Ed in Atlanta I guess
He's just trolling American, but he's not wrong that American is cooked. They've diluted the benefits of their loyalty program so much its not a driver of business anymore. Plus United is such a much more pleasant flying experience. Everyone at American seems to hate their job.
In any other era this would be a headline on 1st of April. But in this day and age, you never know what can become real.
It feels like classic horse trading to me.
Propose merger with AA. Expect hue and cry, followed by rejection.
Propose JetBlue merger. Crickets, then approval.
I just wrote an article this weekend on another site that AA's future could be redefined in 2026 and AA does not have the ability to determine its future given its financial position.
DL and UA are the only two airlines that even remotely have the potential to merging with either of the other two megacarriers - and DL is in far better position than UA.
There is no chance that either DL or UA...
I just wrote an article this weekend on another site that AA's future could be redefined in 2026 and AA does not have the ability to determine its future given its financial position.
DL and UA are the only two airlines that even remotely have the potential to merging with either of the other two megacarriers - and DL is in far better position than UA.
There is no chance that either DL or UA could obtain AA in its entirety but it is possible that carving up AA in pieces could be the deal the kind of big deal that Trump loves to see.
let's see how it plays out but, as I said from the beginning, the notion that UA and B6 would be the sum total of consolidation in the US airline industry is incredibly naive
So your posts are now referred to as "articles"? How appropriate.
lmfao
Gene… ZING!
Yeah, I wrote an article this weekend, too.
Took two flushes to send it down.
Dear Tim
Could you please provide the link to this article ? I’m keen to read it.
on Seeking Alpha
written before this news broke
That's great to hear, Tim's seeking an 'alpha'. Companionship is needed in this lonesome digital world.
“ … as I said from the beginning, the notion that UA and B6 would be the sum total of consolidation in the US airline industry is incredibly naive”
Ha!!!! You’re full of it. You loudly proclaimed on multiple airline blogs that a UA + B6 merger would NEVER under any circumstances be allowed by the Trump DOJ because EWR-LGA-JFK are all considered the same market by DOJ rules. Too much NYC concentration you said....
“ … as I said from the beginning, the notion that UA and B6 would be the sum total of consolidation in the US airline industry is incredibly naive”
Ha!!!! You’re full of it. You loudly proclaimed on multiple airline blogs that a UA + B6 merger would NEVER under any circumstances be allowed by the Trump DOJ because EWR-LGA-JFK are all considered the same market by DOJ rules. Too much NYC concentration you said. Everyone else recognized business as usual was a thing of the past with this administration, but not you. Pipe down until you’re ready to admit you were wrong. It’s a new world and everyone is just guessing. Money rules the day in America now, no one is even pretending the law matters anymore.
Why wouldn’t Kirby be serious? He would be CEO or the largest and most powerful airline in the world. His biggest obstacle isn’t regulatory approval, it will be AA shareholders.
I'm sure it would be approved if only the Melania documentary were the only IFE feature available for the next year. And they would also have to pay her royalties for every view.
The obvious market to divest would be Chicago but other than that the overlap of United and American isn’t that high. DCA and Dulles obviously too but you can argue they’re slightly different purposes. And then LA is massive for the big 3 anyway.
All you point hunters are about to be out of luck. Doesn’t affect me as I pay full fare for First and Business Class, must really suck to be poor. lol
You are still flying commercial with the poors, Get back to us when you start using a private jet.
Thx for the subsidies
I hope you don't choke on your misplaced arrogance pretty boy.
This may just be a swing for the fences moment, as you never know what crazy stuff this administration will allow. I don’t see it happening, but you can’t blame Kirby for trying.
As Larry Ellison demonstrated, any merger is possible if it involves a $50 million contribution to a presidential library . . . which will be inside a hotel . . . which will pay construction costs to the hotel owner . . . which will pay operating expenses to the hotel owner . . . which will not be able to house a "donated" 747.
I hope you don't choke on your misplaced arrogance pretty boy.
I'm in the camp this is a way to make an eventual smaller acquisition (likely B6) more palatable, because yeah I think even this administration wouldn't green light a UA/AA merger.
I can see it. The new airline will be called Trump Air and they will pay the President $1B a year in licensing fees forever. Easy approval.
That’s what I said (see below).
Absurd. As others have pointed out, UA, DL, and AA are at a scale where they don't need to consolidate further and certainly not with each other.
AS, B6, WN, F9, and NK are all eventually going to be in play, once the deep, stagflation recession induced by Trump arrives and the US debt default comes into view.
Those carriers headed for consolidation with each other (F9/NK, AS and B6 most likely). Then, AS into AA and WN into DL.
My Magic 8 Ball shows the imminent stagflation too. But why would Delta want SWA's Midway hub and obsolete fleet?
In many countries, the number of Airlines has dropped to 1 or 2 max. Maybe WN merge with DL and UA/AA merge. What CC would win out - Chase or Citi - I would guess Chase.
100% Chase. Jamie D. plays for keeps, son.
"In many countries, the number of Airlines has dropped to 1 or 2 max."
True, but there's no other country in the world with a domestic airline market remotely close to the size and scale of the USA. (China may have in 25 years, but not yet).
The Chinese airlines are already roughly at the scale of US3’s operations. If China can continue to grow, their mega carriers can become even larger.
If you imagine a world where Hong Kong and Taiwan are reunified, it can easily become the worlds largest airline market by far,
The Chinese airlines are already roughly at the scale of US3’s operations. If China can continue to grow, their mega carriers can become even larger.
If you imagine a world where Hong Kong and Taiwan are reunified, it can easily become the worlds largest airline market by far,
The Chinese airlines are already roughly at the scale of US3’s operations. If China can continue to grow, their mega carriers can become even larger.
If you imagine a world where Hong Kong and Taiwan are reunified, it can easily become the worlds largest airline market by far,
David, third time was the best.
Correct. US is more like Europe or ME where there can be 3-4 strong airlines. Not just a single country.
BA group, Lufthansa group and AFKLM are like DL AA UA.
I'm with you. AA, UA and DL are at scale and don't need a merger.
Blocking JetBlue purchase of Spirit was a bad idea too. I'd rather the fifth, sixth or seventh largest airlines get bigger via mergers to compete against the top four.
Anyway we're in wild times.
Appeasement doesn’t work. The irony is that this is actually the most socialist administration in my lifetime… like, since he doesn’t think the rules apply to him, Trump will probably allow any and all mergers, then simply nationalize them, so long as he gets a golden share, paid to himself, personally.
I actually blame Spirit on failing to follow their vision and see it to fruition. It would've made sense if they stuck to the plan and closed the merger with Frontier.
And, I bet what sealed the deal… he pitched naming the newly merged airline… TRUMP AIR.
Jesus. (No, for real, he thinks he’s Jesus. Probably Scott does, too. FFS.)
This is like Scott Kirby idea of revenge porn.
This answers why Doug Parker and Rob Isom flew together.
While Tim Dunn just soiled his pants gaslighting himself on how great this will be for Delta.
That’s one way to get into JFK.
I'm sorry, but did I read this correctly? You think that credit card companies are *subsidizing* airlines? That's your understanding of the relationship between credit card issuers and airlines?
Like do you think they're doing this out of the generosity of their heart? Jamie Dimon just can't help but do Scott Kirby a favor?
Subsidize doesn’t mean doing so philanthropically or altruistically. There is no definitional assumption that it can’t be for profit.
Credit card companies do indeed subsidize the industry by buying the miles that generates the profits for airlines. These profits are only diminished by, you know, running the airline.
These profits description was accurate.
> Credit card companies do indeed subsidize the industry by buying the miles that generates the profits for airlines. These profits are only diminished by, you know, running the airline.
No this is ridiculous. This is not what "subsidy" means. There is no reasonable definition of "subsidy" which includes the miles that credit card issuers buy from airlines.
When I buy groceries from the store, am I subsidizing the grocery store? Do airlines subsidize oil...
> Credit card companies do indeed subsidize the industry by buying the miles that generates the profits for airlines. These profits are only diminished by, you know, running the airline.
No this is ridiculous. This is not what "subsidy" means. There is no reasonable definition of "subsidy" which includes the miles that credit card issuers buy from airlines.
When I buy groceries from the store, am I subsidizing the grocery store? Do airlines subsidize oil companies?
OED definitions, skipping over the obsolete/historical ones:
"A donation of money or other property, usually made to provide assistance."
"Money or a sum of money granted by the state or a public body to help keep down the price of a commodity or service, or to support something held to be in the public interest. Also: the granting of money for these purposes."
The credit card companies buy miles from the airlines as an arms' length business transaction. The credit card companies profit from interchange/fees/interest, and buy miles for much cheaper than what they make in interchange. The airlines profit because they get actual capital in exchange for issuing a currency that can only be used to buy their product, that doesn't earn interest, that they can devalue at will.
@GW...I was also mystified by Ben's comment. The notion that airlines are all being "subsidized" by Visa and MasterCard is one that belongs in the fruit loop bowl.
Okay upon reading the article more closely, I see that the article didn't talk about credit card companies subsidizing airlines, but rather subsidizing airline fares.
That's even more wrong!
Loyalty programs _raise_ cash prices! They are a tool for price discrimination. You sell off your expiring, off-season, mid-week inventory cheaply _without_ needing to drop cash prices. You sell expensive airfare to employers who pay for business trips, then rebate a portion of the airfare to...
Okay upon reading the article more closely, I see that the article didn't talk about credit card companies subsidizing airlines, but rather subsidizing airline fares.
That's even more wrong!
Loyalty programs _raise_ cash prices! They are a tool for price discrimination. You sell off your expiring, off-season, mid-week inventory cheaply _without_ needing to drop cash prices. You sell expensive airfare to employers who pay for business trips, then rebate a portion of the airfare to the people actually flying (employees), who use this funny money to buy expensive seats for leisure trips they wouldn't pay cash for. Cash prices and award prices diverge close-in for this reason.
It's not a no from me, it's a HELL NO. The only explanation I can buy here is an attempt to make the merger with JetBlue look trivial by comparison.
Seems like a long play for JBLU but AAL jumped 5% AH so go figure
Reality is corporations are fleeing the competitive disadvantage of being headquartered in blue states.
This is just one way to bring the Tulip back to Texas if not Continental’s Houston.
Texas is looking more blue every time I look. The crazies marketing themselves as "R" while touting Jim Jones II & his famous refreshment are greasing the rails for Texas' YUGE slide into the blue spectrum.