United and American Airlines Rise on Merger Pitch Reports

Shares of AMERICAN AIRLINES GROUP INC and UNITED AIRLINES HOLDINGS INC rose in premarket trading on Tuesday following reports that United CEO Scott Kirby discussed a potential merger between the two carriers with the leadership of the United States. Sources indicate that the proposal was raised during a White House meeting in February, sparking investor interest in what could be the largest airline consolidation in over a decade. The discussion reportedly took place on February 25 during a session focused on the future of Washington’s Dulles International Airport. Kirby argued that a combined entity would be better positioned to compete internationally, noting that foreign carriers currently control a majority of long-haul seat capacity to and from the country despite most passengers being domestic citizens. The stock recovery follows a period of significant pressure on the aviation sector. Shares of both major airlines had slumped recently as geopolitical tensions involving Israel and Iran led to a sharp increase in jet fuel prices. Since that conflict began in late February, American Airlines shares had dropped 14.1%, while United Airlines had fallen 10.4%. Despite the market's positive reaction, with American shares rising 4% and United rising 2% on Tuesday, industry experts warn of significant hurdles. Antitrust authorities and industry officials have expressed concerns regarding reduced competition, potential fare increases, job losses, and substantial route overlaps in a market already dominated by four large carriers. Both United and American have declined to comment on the reports, and the White House has not issued a formal response to inquiries regarding the February meeting.