United and American Airlines rose in price after reports of a possible merger into the giant

Shares of United Airlines and American Airlines jumped in trading on April 14 after Reuters reported on the idea of merging the two already large companies. According to the agency's sources, United CEO Scott Kirby suggested that U.S. President Donald Trump consider a merger. It could be the biggest deal in the industry in more than a decade, Reuters noted.

Shares of American Airlines at the auction on April 14 rose by 7.5%, while quotes of United Airlines added 2.3%. At the same time, in recent weeks, both securities have become cheaper against the backdrop of the U.S. and Israel's war with Iran, which sharply raised the price of aviation fuel, notes Reuters. Since the beginning of the conflict, the airlines have lost about 6% of their value.

On Tuesday, their shares were backed by a report by the agency's sources about a meeting between United CEO Scott Kirby and U.S. President Donald Trump, which, according to their sources, took place on February 25. At the meeting, according to Reuters' sources, Kirby said that a unified carrier would be able to compete more effectively on international routes, while now foreign airlines control most of the long-haul traffic to and from the United States.

It is unclear whether United Airlines has sent a formal offer to American Airlines and whether any process for a deal has been launched, Reuters writes.

United and American declined to comment to the agency, and the White House did not respond to a request for comment.

Industry representatives and antitrust experts said that approval of such a deal would face serious obstacles. They pointed to the risks of reduced competition, higher fares, job cuts and significant route overlap in an already highly concentrated U.S. market dominated by four major carriers, Reuters writes. United and American are among them and together control more than a third of the market. Their merger would create the largest airline in the world, Bloomberg notes.

The result would be a giant with revenues of more than $100 billion and a fleet of more than 2,800 aircraft. However, a significant overlap of hubs across the U.S. territory would probably cause stiff resistance from smaller competitors fearing displacement, the agency writes.

U.S. Transportation Secretary Sean Duffy said in an interview with CNBC on April 7 that if major airlines merge, they would likely have to sell some assets because U.S. authorities are not interested in excessive market concentration that could lead to higher prices for consumers.

The emergence of the merger idea shows that market volatility due to the war in the Middle East has brought the topic of consolidation back to the forefront, Bloomberg notes. Kirby said in a March address to employees that the airline could benefit from a possible "shakeup" of the industry amid rising oil prices, potentially opening up opportunities for acquisitions. In a March 24 interview with Bloomberg, he said the company would be willing to buy back some assets. Asked if there was talk of buying entire companies, United's chief executive said: "We'll see, there are a lot of rumors going around."

At the same time, American Airlines faces a number of operational and strategic challenges - from the need to reduce about $35 billion in debt to trying to win back corporate customers disappointed by an unpopular marketing strategy, which the carrier later abandoned, Bloomberg writes. At the same time, CEO Robert Isom is under pressure from pilots who accuse him of failing to close the gap with more profitable competitors, including Delta Air Lines and United.

This article was AI-translated and verified by a human editor