United Airlines CEO Scott Kirby is a very smart, but increasingly strange and unpredictable, leader. He does a great job propelling his airline in the right direction, but I feel like he’s saying more and more things that make you scratch your head, and make you wonder if he is just getting a bit of a God complex, or whether he’s trolling, gaslighting, or what not. Here’s the latest example of that.
In this post:
Kirby not interested in consolidation for United
Several weeks ago, we learned how Kirby reportedly approached President Trump about the concept of United buying American. We know Kirby has spent a lot of time sucking up to the Trump administration, and that Trump might be less opposed to consolidation than Biden was, for example.
However, the level of damage such consolidation would do to aviation in the United States is unthinkable. Nonetheless, Kirby even publicly made his case, using some highly questionable, patriotic “trade deficit” argument (which I guess might resonate with Trump, but otherwise isn’t very sound logic).
Many of us wondered if this was all some sort of a foot in the door approach to get approval for a deal for United to acquire JetBlue. After all, that’s something that has been suggested for a very long time, and there have been questions about the odds of that getting regulatory approval. With Spirit having recently liquidated, I’d argue there has never been a better time for that approval to be likely.
That brings us to the latest update, based on comments made by Kirby at a Bernstein investor conference today. Kirby claimed that he believed the only transaction that would make sense would be a deal with American, and that’s something American isn’t down for (since management at the airline doesn’t think such a deal would get approval).
Kirby said “I don’t think that United at least is going to participate in any consolidation for any time I can see in the foreseeable future.” Furthermore, when the concept was brought up of wondering if the American deal was just a ruse to try to get approval for the JetBlue deal, he called that “idiotic,” and said “the last thing I’m gonna do is buy a route network that loses money” (thanks to Will Guisbond at The Air Current for reporting this).
Is Kirby trolling, playing coy, or was there a change of heart?
United and JetBlue have the “Blue Sky” partnership, whereby the two airlines are cooperating with one another when it comes to an interline agreement, a loyalty collaboration, etc. We know United’s ultimate goal is to return to New York Kennedy (JFK), and Kirby views JetBlue as a key part of that goal.
What’s so strange here is that over the past couple of years, United executives have made comment after comment suggesting that they’d be interested in a merger with JetBlue, if they thought it could get regulatory approval, and if JetBlue was down. Heck, a little over a year ago, Kirby even stated that “the ball is going to be in JetBlue’s court” when it comes to consolidation.
So to basically see him now say “pssssh, as if we’d be interested in a deal with a money losing airline” is a very odd statement to make. It’s one thing if his argument was “well, JetBlue has almost $8 billion in debt, and that’s going to be very costly to service, if we have a deal.”
But honestly, his argument is rather unsophisticated, if you ask me. That’s why I’m suspicious as to whether Kirby is actually being sincere in what he’s saying, or if he’s playing a game. Seriously, a smart airline executive is really going to just view JetBlue as “a route network that loses money?”
The reality is that JetBlue’s network could be profitable within a very short period of time if it were properly run, and part of a larger operation:
- Credit card revenue would be much bigger if it were part of the United network
- JetBlue desperately needs to add premium cabins on all flights, which is something that’s happening, and should help with revenue
- If JetBlue were part of Star Alliance and operated as part of the transatlantic joint venture, there would be so much connectivity potential at JFK, given the number of foreign Star Alliance airlines
Anyway, I don’t know what to think here, other than that Kirby is becoming an increasingly less reliable narrator on the industry. Again, that’s not to dismiss his intelligence and the great job he’s doing running United, but it’s hard to take statements too seriously from someone who swings from one extreme to the other so quickly, without even being willing to ackwowledge those shifts.
One certainly wonders what this means for JetBlue. The airline is inching closer to Chapter 11 bankruptcy, as it hasn’t turned a profit in seven years, continues to lose money, and has a debt level that’s becoming hard to service. Even if the airline can improve its operating margins, it still makes it hard to continue without some sort of a reorganization.
We know JetBlue was exploring merger opportunities with several airlines, so it’ll be interesting to see what comes of that. Alaska could be a good fit, it just seems too soon, given that the Hawaiian integration is ongoing. A Southwest deal makes no sense to me. Meanwhile I think an American deal actually has the most upside, but the issue is that American is also in the weakest financial situation among potential partners.
Bottom line
United CEO Scott Kirby is now claiming that the airline has no interest in consolidation, and certainly not with JetBlue, because the last thing Kirby is going to do is “buy a route network that loses money.” Kirby’s messaging is unbelievably inconsistent, so I don’t even know what to make of this.
Is Kirby serious now, or is he bluffing, in hopes of driving down JetBlue’s stock price? And if he is serious, why doesn’t he at least acknowledge how his perspective on this has changed over time? He’s almost acting as if he doesn’t understand how anyone could possibly think that a United and JetBlue deal might be under consideration.
What do you make of Kirby’s latest JetBlue comments?
Scott is smoking mirrors.
Scott is smiling mirrors. He never completes anything that he suggests. He just throws things out and holds something actually sticks.
Who wants anything to do with this Noo Yawk piece of evil flaming garbage? Mint is shint.
Just waiting for B6 to go bankrupt
Hard to imagine any reason to acquire JetBlue outside of chapter 11. If and when B6 goes in (end of 2026 or sometime in 2027 perhaps?) and you don't have to take all of the debt, B6 in whole or in part becomes a more attractive opportunity. The BlueSky partnership is simply a form of due diligence for a potential transaction. Will be interesting to see if a bidding war breaks out between UA and AA for B6.
There is a host of internet commenters - including Ben - that have believed that UA would acquire B6 despite the fact that UA execs have repeatedly said they want the choice morsels of B6 but do not want the whole thing.
I big reason for not wanting the whole thing is the debt that B6 has and Kirby is correct that B6 loses money and it is highly unlikely that UA could use the...
There is a host of internet commenters - including Ben - that have believed that UA would acquire B6 despite the fact that UA execs have repeatedly said they want the choice morsels of B6 but do not want the whole thing.
I big reason for not wanting the whole thing is the debt that B6 has and Kirby is correct that B6 loses money and it is highly unlikely that UA could use the assets that B6 has to make money.
Let's also face a reality that many do not want to admit. DL has done a pretty good job of making B6' life miserable over the past 20 years just as DL has done with every other airline in every other hub market where DL stood a chance at becoming the largest airline. UA knows full well, no matter how much it wants to say that it is equal to or bypassed DL, that DL will make UA's life even more miserable than life has been for B6.
UA wants the best parts of B6 at a discount and they are willing to play a waiting game and pick up what they can in bankruptcy - if that happens - before they buy B6 whole.
Who wants to take the first stab here?
Literally or figuratively?
you can't fix, crazy. Timmy proves it.
" just as DL has done with every other airline in every other hub market where DL stood a chance at becoming the largest airline."
you do have to admire the qualifiers he puts in there nowadays... Basically it's now "delta is awesome in every hub market where they had a chance at winning... but where they spent money on an obviously losing proposition -- well, we shouldn't...
you can't fix, crazy. Timmy proves it.
" just as DL has done with every other airline in every other hub market where DL stood a chance at becoming the largest airline."
you do have to admire the qualifiers he puts in there nowadays... Basically it's now "delta is awesome in every hub market where they had a chance at winning... but where they spent money on an obviously losing proposition -- well, we shouldn't talk about those since Delta is clearly losing in many markets"
First the "where they had a chance at being the largest" which basically excludes LAX, Austin, Seattle, Miami vs AA (oh tim... we all remember your rants about how AA was done for in MIA...), etc
Then you've consistently lied about Delta's actual size in NYC vs United then changed your tune when facts were brought up no matter how many ways you tried to skew the data from total flights to widebodies in NYC, etc.
SEA... I guess that's what you were trying to avoid being brought up since Delta never had a chance at being bigger.
Then the qualifier of "hub" so that other items about Delta's network can be ignored.
Ignores how Delta walked away from BNA and SJC focus cities when WN showed them the door.
It also ignores how Delta has lost so much share across the midwest to AA and UA
It ignores the enormous marketshare in the Southeast Delta has lost to AA
among other things...
I admire your new qualifiers, tim. They're very amusing ways for you to seem right to yourself but it's basically like saying "Delta is the greatest airline in the world headquartered SE of Chattanooga."
Keep Climbing, buddy. Everyone has their popcorn ready for your latest rants.
OMFG.
First Kirby.
Then Tim Dunn.
The confidence of one doing the opposite and the other always fluffy wrong.
Heck yeah, UA will be buying B6.
Mark this moment.
The same United that's weak in Latin America without a strong hub for southbound traffic, and has been eyeing focus cities like Fort Lauderdale/Miami? hmmm
Better off waiting for JetBlue to file chapter 11 and buy the company out of bankruptcy, minus all the debt.
I wouldn't put too much stock into that comment. If UA sees additional consolidation by one of the other US4 he's going to jump. It's just a matter of whether any of the US4 will seek to do an acquisition.
and DL just said that it has no interest in consolidation - and doesn't need it.
DL knows full well that the chances of merger or even asset acquisitions involving the big 4 is slim to none.
If DL says it doesn't want to participate in consolidation and AA can't afford it, there is little to no likelihood that any regulator is going to allow any one of the big 4 to participate in consolidation
I believe him and here's why. Why would UA buy JetBlue and take on their $8.4 billion dollars (and growing) debt load.
United can achieve what they want which is JFK slots if they just wait and allow JetBlue to enter bankruptcy and shed a ton of that debt or wait for JetBlue to liquidate like Spirit and pick up the pieces they want.
I don't think United wants any to do with...
I believe him and here's why. Why would UA buy JetBlue and take on their $8.4 billion dollars (and growing) debt load.
United can achieve what they want which is JFK slots if they just wait and allow JetBlue to enter bankruptcy and shed a ton of that debt or wait for JetBlue to liquidate like Spirit and pick up the pieces they want.
I don't think United wants any to do with the A220 and the engine issues that aircraft has. I don't think FLL is all that important to United in fact I think if they were to purchase B6 they'd just pull a bunch of that capacity out of FLL and redirect it elsewhere. United might be interested in BOS and giving DL a run for its money in BOS that could be a toss up. However the one airport United wants back in in a significant way is JFK. If B6 were to go under I don't see the DOT handing Delta or American a ton of additional slots, that isn't to say United would get all of B6's JFK slots but they would most likely be first in line to get the lionshare of B6's JFK slots.
I think Kirby believes another US carrier will enter bankruptcy and it United is patience they could probably get their hands on the good parts of JetBlue and leave the rest on the bankruptcy floor.