
American Airlines shares dropped in premarket trading on Monday after it dismissed discussions of a potential large-scale merger with United Airlines late in the previous week.
The historic U.S. airline released a statement on Friday, soon after the market closed, to refute speculation about a possible agreement between the two carriers.
“American Airlines is not involved with or interested in any negotiations regarding a merger with United Airlines,” the statement said.
“While adjustments in the wider airline market may be essential, a union with United would harm competition and consumers, which is inconsistent with our interpretation of the Administration’s approach to the industry and principles of antitrust regulations,” it continued.
American’s stock last decreased nearly 3% in premarket trading, reversing the gains made on Friday during a broad market upswing.
United CEO Scott Kirby proposed a possible merger with competitor American to the Trump administration at the White House in February, although it is believed the airline had been contemplating the idea since at least the previous fall.
“Size would enhance” competition on international flights from the U.S., Kirby stated during the “Stratechery” podcast in an episode aired in January.
He noted that when passengers travel to the Middle East, they often opt for airlines from that region.
“[But] if we are larger and have more options for those travelers, perhaps, it…[makes] more sense for them to choose us when traveling to the Middle East.”
A merger would create the world’s largest airline, which raises significant regulatory scrutiny and fears of forming a monopoly in the market.
The two companies, along with Delta Air Lines and Southwest Airlines, already control around 80% of the domestic market share.
A merger between United and American would lead the two to command approximately 40% of the domestic market, according to airline data analytics firm OAG.
“President Trump has a penchant for seeing major deals come to fruition,” U.S. Transportation Secretary Sean Duffy stated on CNBC’s “Power Lunch” earlier this month, expressing that there is “opportunity for mergers in the aviation sector.”
Nonetheless, Duffy cautioned: “Should a merger occur between major airlines, they will need to divest certain assets. We do not want to see a single airline controlling vast infrastructure in America; otherwise, it will impact pricing over time, resulting from a lack of competition.”
George Hay, a law professor at Cornell University, previously informed CNBC: “This would be unprecedented. I can’t envision even the faintest possibility that a court would approve it.”
— Leslie Josephs contributed to this article








