What would a US-US merger mean, from antitrust hurdles to airline tickets?

United Airlines CEO Scott Kirby has reportedly floated the idea of ​​a potential tie-up with the competitor American Airlines To the Trump administration earlier this year, a proposal that, if implemented, would create the world’s largest airline.

While the Trump administration has appeared more open to mega deals than its predecessors, such a merger would face intense regulatory scrutiny with the four largest airlines (those two carriers, plus Delta Airlines and Southwest Airlines) It already controls about 80% of domestic capacity. If combined, American and United would have a domestic share of about 40%, according to airline data firm OAG.

“This would be the biggest ever,” said George Hay, a law professor at Cornell University. “I don’t see even the slightest chance the court would allow it.”

American and United declined to comment on the merger discussion, which was reported by Bloomberg on Monday. The White House did not immediately comment on the reported discussion.

US stocks rose 8% on Tuesday, but are still down more than 20% since the beginning of the year. United shares rose slightly more than 2%, trimming its losses this year to about 13%.

Daniel McKenzie, an aviation analyst at Seaport Research Partners, said he attributed the stock’s move “to short covering rather than giving the market legitimacy to the merger idea.” He added that the deal “will be dead on arrival, although it will be politely reviewed until the public backlash becomes deafening.”

If the Justice Department “doesn’t object to that, what will they object to? It’s very difficult to envision a deal of this size and focus happening,” said Samuel Engel, senior vice president of consulting firm ICF.

Consolidation allows carriers to better control capacity, which in turn can lead to higher prices, generally a key consideration in antitrust investigations, he said.

The American-United merger will likely require significant divestitures on routes where the combination of the two companies means only one or two airlines serve that route, said Tom Fitzgerald, an aviation analyst at TD Cowen, who said 289 routes now fit that criteria.

However, the Trump administration has shown warmth toward mergers in the industry.

“Is there room for some consolidation in the airline industry? Yes, I think there is room,” Transportation Secretary Sean Duffy told CNBC’s Phil LeBeau last week, regarding industry consolidation. President Donald Trump “likes to see big deals happen,” Duffy said, adding that he would have to “review” the partnership.

The deals come as the airline industry faces rising jet fuel costs, the largest expense for airlines after labor.

Airlines are reducing their capacity plans to save costs, which could lead to an increase in airfare prices.

“During my career, I have witnessed numerous periods of turmoil in this industry. Time and time again, high fuel prices have been the most powerful catalyst for change, spinning off winners and forcing weaker players to rationalize, merge or be eliminated, said Ed Bastian, Delta’s CEO, on an earnings call last week. “Delta is moving from a position of advantage.”

Delta completed its merger with Northwest Airlines in 2008, giving it an advantage over other carriers that completed mergers later. Modern American Airlines is the product of the 2013 merger with American Airlines, where many of the airline’s current executives have worked, including United’s Kirby and American CEO Robert Isom.

Kirby, who was fired by American in 2016, has competed head-to-head with his former employer, including in key markets like Chicago.

Delta and United already account for most of the US industry’s profits.

American has lagged behind both airlines as it has struggled to tap the high-spending customers who drive revenue for major airlines in recent years. American’s net income was $111 million, on sales of $54.6 billion, last year, while United reported net income of $3.35 billion, on sales of $59 billion, according to company filings.

The Biden administration challenged two major airline players, and won. A federal judge struck down the US partnership with… JetBlue Airlines In the Northeast in 2023 and early 2024, the court ruled against JetBlue’s planned acquisition of Spirit Airlines, which is now in its second bankruptcy.

JetBlue and United formed a partnership that allows customers to book on each other’s airlines but falls short of schedule coordination under that failed U.S. deal. Kirby has expressed reluctance to move forward with this deal.

“I love the partnership with JetBlue,” Kirby said in Boston last month. “I think highly of their team. They have the right DNA and culture, but…we’re doing a great job growing. I feel really good about our independent unit.”

He added, “Mergers are large, difficult and complex.”