United Airlines CEO pitched American Airlines tie-up in meeting with Trump, sources say

By David Shepardson and Rajesh Kumar Singh

WASHINGTON/CHICAGO, April 13 (Reuters) - United Airlines CEO Scott Kirby pitched the potential for merging with American Airlines in a meeting with U.S. President Donald Trump in late February, two sources said, raising an industry-reshaping deal likely to be met with significant regulatory scrutiny.

A combination of two of the largest U.S. network carriers would mark by far the most consequential consolidation since the last wave of big airline mergers ended more than a decade ago and further tighten a U.S. domestic market already dominated by four players of roughly equal size.

Including international flights, United UAL.O and American AAL.O were already the world's two largest airlines by available capacity in 2025, according to OAG data, and their combined size would far eclipse rival Delta Air Lines DAL.N, which ranked third.

The meeting with Trump was on February 25, said the sources with knowledge of the matter, three days before the start of the U.S.-Israeli war with Iran that sent jet fuel prices skyrocketing and airlines scrambling to recover higher costs through fare rises and bag fee increases.

Kirby has made the case to Trump administration officials that a merged United-American would be a stronger competitor for international travel, the sources said, noting that the Trump administration has focused on U.S. trade deficits around the globe. Kirby said at a forum in September that two-thirds of long-haul seats to and from the United States are on foreign carriers, but 60% of passengers are U.S. citizens.

His comments about a potential tie-up came toward the end of a scheduled White House meeting on the future of Dulles airport, the sources added.

Industry officials told Reuters privately the chances getting a merger approved would be exceedingly difficult, citing likely opposition from unions, rival airlines, lawmakers and airports as well as the impacts on routes, major hubs and employees.

One person close to the White House said there was skepticism about a potential tie-up, citing the impact on competition and ticket prices at a time when the Trump administration is concerned about soaring jet fuel prices raising fares ahead of the midterm elections in November.

It was not clear whether United has made any formal approach to American or whether a process was underway to pursue a deal. The sources spoke on condition of anonymity because the talks were not public.

United and American declined to comment on the potential combination, which was first reported by Bloomberg. The White House did not immediately respond to requests for comment.

American shares rose more than 5% in after-hours trading following the report, while United shares were little changed.

HIGHLY CONCENTRATED MARKET

The U.S. airline industry is already highly concentrated, with American, Delta, United and Southwest Airlines LUV.N controlling the bulk of domestic traffic, each with a share of roughly 17%, according to Department of Transportation data.

American has been lagging its rivals financially, but any deal would test antitrust limits after regulators successfully blocked JetBlue Airways' JBLU.O planned far smaller acquisition of Spirit Airlines in 2024.

It could also redraw competition at key hubs such as Chicago and Dallas at a time when rising fuel costs are widening the gap between stronger and weaker airlines.

U.S. Transportation Secretary Sean Duffy said this month that he thought there was room for consolidation in the U.S. airline industry, but said any potential deal would face close scrutiny on how it would affect consumers.

American has been under pressure to improve profitability and close the gap with Delta and United, after unions earlier this year criticized management over lagging returns. The airline has pointed to strong premium demand and corporate travel to drive a recovery in 2026.

The Texas-based carrier also carries about $25 billion in long-term debt, more than its larger rivals, leaving it with less financial flexibility as it works through a turnaround at a time of high jet fuel prices.

American is by far the smallest of the big four U.S. airlines by value, with a market capitalization of $7 billion, compared with $31 billion for United, $19 billion for Southwest and $44 billion for Delta.

United, by contrast, has struck a more confident tone as high fuel prices test the industry, with Kirby saying last month that a prolonged cost shock could create opportunities for stronger airlines to gain share as weaker rivals struggle.

Kirby previously served as American's president from 2013 to 2016 and has in the past played down the appeal of large acquisitions. "But man, all the headache, all the brain damage of buying a whole airline to get there. That's a lot to do," he said last year when asked about potential deals.