5 things to know about a potential airline merger of United and American

By Claudia Assis

Rivals, consumers and antitrust authorities unlikely to 'simply go along with this'

Even for a White House viewed as a friend to business - and foe to regulation - a United-American combo would raise serious antitrust concerns.

Even in a merger-friendly Trump administration, the airline industry seems to be skeptical about a potential merger between United Airlines and American Airlines.

A combination between the two U.S. majors would likely face stiff opposition from regulators and consumers, as it would create an airline behemoth with a dominant presence in key domestic airports, cut into competition and potentially push already rising domestic fares still higher.

United Airlines (UAL) declined to comment, and American (AAL) did not immediately return a request for comment. The reports, however, dovetailed with recent comments by Transportation Secretary Sean Duffy on merger activity in the airline industry. Maybe where there's smoke, there's fire.

American's stock rose 8% on Tuesday, snapping a three-day losing streak. United shares climbed 2.1%. Meanwhile, Delta's stock (DAL) jumped 6.9%.

Here are five things to know about that potential merger, unlikely as it may seem.

It would face serious scrutiny

Even with a White House viewed as friendly to business, a United and American combination would be bound to raise serious concerns.

"It seems unlikely that industry rivals, consumer groups and antitrust authorities would simply go along with this," said Stephen Trent, an independent aviation analyst.

A combined carrier would control about 40% of U.S. domestic available seat miles, a key industry metric for capacity, according to Tom Fitzgerald, an analyst with TD Cowen.

It would have "dominant" market shares in New York City, Chicago and Los Angeles, "triggering major antitrust, divestiture, alliance, execution and valuation risks," Fitzgerald said.

The administration of President Donald Trump might have signaled some support, however. Just last week, Duffy said in an interview with CNBC that he thinks there is "room" for mergers in the industry, and that Trump "loves to see big deals happen."

Duffy said that if a merger were to happen between two large U.S. airlines, they'd have to "peel off" some assets. He added that he wasn't going to "pre-commit to anything."

The Transportation Department and the Justice Department, along with Trump, would have to approve the combination.

Any deal will be scrutinized for its impact on U.S. consumers, Robert Stallard, an analyst with Vertical Research Partners, said in a note.

What a merger would do to fares

The main concern would be higher fares, of course. Fares are already climbing, due to higher fuel costs resulting from the conflict with Iran, and as airlines adjust seat capacity accordingly.

Airlines have substantially raised fares in recent weeks, a UBS report found.

If industry consolidation were to occur, airfares are likely to jump and remain elevated, Trent said.

UBS's data showed that Delta and United's lowest economy fares on short-haul flights in the week ended April 4 were up 30% to 35% from a year before.

Both airlines "have witnessed sizable increases in short-haul fare growth over the past few weeks," UBS said in the Tuesday note.

Short-haul domestic basic economy fares at American were up about 10% for that week, UBS said. Fares for travel four weeks out are up 20% to 25% for Delta, United and American, and those fares were up by mid-teen percentages for Southwest (LUV) and JetBlue (JBLU), the analysts said.

UBS said it used about two months' worth of booking data to calculate average prices, taking into consideration route coverage. The dataset focused on the top 20 domestic routes across the country.

Many on Wall Street expected airline mergers this year

Earlier this year, Citi analysts polled investors on the likelihood of airline mergers and acquisitions and found that nearly 60% of investors believed that a "major" M&A event would be likely in the industry.

That surprised Citi analysts - as being low. Current market conditions, notably "financial distress among a narrow category of carriers," has historically led to M&A, the Citi analysts said.

"A merger is a powerful tool which accelerates rationalization of capacity and we expect M&A, in a variety of forms (consolidation of bankrupt but also non-bankrupt carriers) to be a focal point of industry debate throughout 2026," they said.

In January, Allegiant (ALGT) announced its intention to buy rival budget carrier Sun Country (SNCY) for about $1.5 billion. Then in late March a report from Semafor said that JetBlue (JBLU) had hired advisers to explore selling itself to a competitor.

Alaska Airlines (ALK) announced a deal to buy Hawaiian Airlines in December 2023, and the merger was approved in the fall of 2024. But Alaska and Hawaiian had limited route overlap, and in the place where they did overlap - West Coast to Hawaii flights - Alaska had lower fares, Trent said.

For a merger of similar magnitude to a potential combination of United and American, "one really has to go back to the American Airlines and U.S. Airways merger in 2011," Trent said. But that really was a different story, as the four major U.S. airlines today have about 80% market share, he said.

Under the Biden administration, a proposed merger between JetBlue and Spirit Airlines was blocked in 2022; the combined company would have represented about 9% of 2022 domestic ASMs, Jefferies analysts said.

How big it would be?

United is already the world's biggest air carrier by a variety of metrics, and American ranks second. United had 4.7% of global market share in 2025, and American 4.3% of global market share, according to analysts at Jefferies.

A combined company with about 9% market share would put Delta a somewhat distant second, with 4.3% market share, the Jefferies analysts said.

Domestically, a combined United and American "would be a behemoth with 50% or greater share of domestic [available seat miles] at 159 airports," TD Cowen's Fitzgerald said.

Even if the federal government were to give its blessing, there would be opposition from state attorneys general and "significant" lobbying against the deal by the rest of the industry, Fitzgerald said.

More pushback could come from each airline's global alliance partners - international carriers that work together to provide global coverage - and labor unions, he said.

United is a member of Star Alliance, and American is a founding member of Oneworld Alliance. A combined company would also have to integrate complex union seniority lists; harmonize a massive fleet, which comprises both Boeing (BA) and Airbus (FR:AIR) jets; and face a web of co-branded card programs offered by each airline.

How about higher fuel prices and energy shocks?

Higher jet-fuel prices amid the ongoing conflict with Iran are affecting all airlines, but some found themselves better prepared than others.

Delta and United are weathering the fuel shock with healthy balance sheets, while American has struggled to find consistent profitability.

Delta reported first-quarter earnings last week, and the print boosted the stock as the airline's quick response to the spike in fuel costs through surcharges and higher fares, coupled with strong travel demand, led to profit and revenue that beat expectations. The carrier offered an upbeat outlook.

In March, both Delta and American effectively told investors not to worry about surging oil prices, raising their revenue-growth outlooks for the current quarter.

United is scheduled to report earnings on April 21, with American following on April 23.

So far, the U.S. consumer has been resilient in the face of the price shocks, but consumer sentiment "is now cracking, which could prompt pushback among leisure and lower-end travelers," analysts at Melius said in a recent note.

"A resolution to the Iran conflict could provide some relief ... but in the meantime, expect ongoing volatility across the travel sector," the Melius analysts said.

The "swift" change in fuel costs and the impact on already fragile industry profitability is likely to force airlines to pull down supply, the analysts said. United has been the most open to change, stating that it will reduce capacity beginning in May, focusing on off-peak flying, but others have been slower to follow.

London-traded Brent crude-oil futures (BRN00) have risen more than 50% since airstrikes by Israel and the U.S. against Iran began in late February. Jet fuel has risen even more, with benchmark U.S. Gulf Coast jet-fuel prices up nearly 90%.

-Claudia Assis

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04-14-26 2004ET

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