American Airlines and Alaska Airlines are discussing a potential revenue-sharing arrangement and other partnerships, Bloomberg reported on Wednesday.
The financial news outlet cited people familiar with the talks. Neither American nor Alaska has commented on the potential partnership.
According to Bloomberg, the idea of a merger between the two carriers was floated early in the discussions but did not garner support. Instead, American and Alaska will pursue a revenue-sharing deal, which would allow coordination on routes, planning, and pricing. The partnership would have to be approved by the federal government before taking effect.
American has been at the center of considerable industry speculation after a report, also from Bloomberg, that United CEO Scott Kirby pitched a merger with the Fort Worth, Texas-based airline to President Donald Trump in February. American initially declined to comment on the news, then said last Friday that it was not in discussions with United and didn’t want to be.
Separately, the president told CNBC that he does not support a United-American combination.
While few details have been established – and none officially confirmed by the airlines involved – an alliance between American and Alaska could give American greater access to Alaska’s West Coast network, while Alaska would benefit from American’s other airline partnerships.
American lags behind its two main competitors, United and Delta, in profitability, and a closer relationship with Alaska could be seen as a potential revenue generator with limited upfront costs.
Both American and Alaska are members of the oneworld alliance. They also have a codeshare agreement in place and offer some reciprocal benefits and upgrades.
