Shares of American Airlines and United fell after rejecting the creation of an airline giant

Shares of United Airlines and American Airlines fell in trading on April 20, after the latter publicly rejected the idea of a merger. American called the deal, which would have resulted in a giant carrier on the market, a threat to competition.

Quotes of American Airlines in trading on Monday, April 20, fell by 5.8%, then slightly reduced losses. United securities fell by 2.6%.

The decline was triggered by American's statement released Friday just after markets closed. "American Airlines is not involved or interested in any merger negotiations with United Airlines," the carrier said. The company added that such a merger "would be detrimental to competition and consumers." American Airlines took the unusual step of rejecting the deal before it was even formally proposed, MarketWatch notes.

According to Bloomberg sources, the idea of merging the two carriers was proposed by Scott Kirby, head of United Airlines. As the agency learned, in February he submitted it to the Donald Trump administration for consideration. The merger would create the world's largest airline player with a share of about 40% of the U.S. domestic market, CNBC writes, citing the analytics platform OAG. Together with Delta and Southwest, the four airlines control about 80% of flights in the country, CNBC notes.

From the regulator's point of view, the possible deal would be too large, said Citigroup analyst John Godin. The merged company would eventually account for more than a third of all domestic transportation, and it would also disrupt international projects, he added.

"It would be the biggest deal in history and there's no way it would get approved," CNBC quoted Cornell University law professor George Hay as saying.

Since the beginning of the year, American Airlines quotes are down 20% and United has lost 10% of its value.

The average target price of United Airlines securities is $131.6, which means the potential growth of 29% relative to the level of the last closing. The vast majority of analysts, whose assessments are monitored by MarketWatch, recommend the company's securities to buy: "bullish" ratings were assigned to them by 23 out of 28 experts. Five of them advise to hold the stock.

American Airlines shares have a 17% upside potential with an average target of $15. 16 analysts recommend these securities to buy, and 11 - take a neutral position. In addition, the company's securities are assigned one "bearish" rating.

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