American Airlines CEO Robert Isom poured more cold water on talk of a potential merger with United during an earnings call Thursday but did not rule out future deals if the correct partner and circumstances are present.
Asked if the environment is right for consolidation in the industry, Isom stressed that a combination with United, reportedly pitched by CEO Scott Kirby in February, was a nonstarter.
“We’re going to be roommates and we’re not getting married,” Isom said, referring to American’s competition with United at Chicago O’Hare. “The idea of the two largest airlines in the world getting together, that’s something that we’ve viewed as being anticompetitive, and obviously everybody who has weighed in has said the same thing.”
For now, “American will focus on American,” he said, with an emphasis on expanding the carrier’s reach through international partnerships. But Isom also left the door open to future prospects.
“If there are opportunities from a consolidation perspective, or if there’s assets that become available in the marketplace, American has a long history of being aggressive,” he said. “We’ve got a lot of experience, and whether it’s the potential for M and A, or the work we’ve done to pioneer partnerships, we’re going to be on the forefront of that.”
Kirby reportedly floated the idea of a United-American merger in a meeting at the White House, arguing that the resulting carrier would be better positioned to compete internationally. American initially declined to comment, then released a statement saying that it was not in discussions with United and does not favor a linkup. Separately, President Donald Trump said he would oppose such a deal.
The recent spike in jet fuel prices has destabilized a number of low-cost carriers and encouraged speculation that those airlines may have to merge or be acquired to survive.
Spirit is currently in discussions with the White House over a potential rescue package, which could be worth up to $500 million.
American and Seattle-based Alaska Airlines are believed to be in discussions over a new strategic partnership, which could include revenue sharing. Bloomberg, which broke the story earlier this week, reported that the idea of a merger between the two carriers was brought up but failed to gain support.
The airlines have not commented on the report, and so far no new partnership has been announced.
