US transportation secretary sees room for airline mergers

By David Shepardson

WASHINGTON, April 7 (Reuters) - U.S. Transportation Secretary Sean Duffy said on Tuesday he thinks there is room for consolidation in the U.S. airline industry but said any potential deal would face close scrutiny on how it would affect consumers.

"If there was a merger between some of the larger airlines, they would have to peel off some of their assets," Duffy said on CNBC. "I am not going to pre-commit to anything."

Sharply higher jet fuel prices during the U.S.-Israeli war on Iran have fed speculation there could be a new round of consolidation in the U.S. airline industry. Any deals would need approval of President Donald Trump, USDOT and the Justice Department, Duffy said.

"Who knows who is going to match up?... Is there room for some mergers in the aviation industry? Yeah, I think there is," Duffy said, acknowledging "there is a lot of chatter" about potential deals.

For decades, antitrust regulators approved a series of mergers that have resulted in about 80% of the domestic passenger market being controlled by four U.S. airlines - American Airlines, Delta Air Lines DAL.N, United Airlines UAL.O and Southwest Airlines LUV.N.

In 2024, JetBlue called off its $3.8 billion merger with the struggling Spirit Airlines after a U.S. judge blocked the deal on anti-competition concerns. Last year, JetBlue announced ​a partnership with United, ​allowing travelers ⁠to book flights on both carriers' websites and interchangeably earn and use points in their frequent flyer programs.

In 2024, former President Joe Biden's Departments of Justice and Transportation opened a broad public inquiry into competition in air travel.

Biden made boosting airline competition a top priority and his administration took an aggressive approach to blocking consolidation efforts in the airline industry.