United Airlines CEO Scott Kirby said Wednesday that the carrier does not plan to pursue consolidation for the foreseeable future, weeks after American Airlines declined to engage in a potential merger.
At a Bernstein investor conference, Kirby argued that the economics only ever justified the kind of large combination United had been seeking, and without a counterpart willing to engage, that door was now closed. Kirby told the conference that merger activity was effectively off the table, according to Reuters.
"I don't think that United at least is going to participate in any consolidation for any time I can see in the foreseeable future," Kirby said.
The backstory dates to late February, when Kirby floated the idea of joining the two airlines in a meeting with President Donald Trump — a move that, if completed, would have been the most significant reshaping of the U.S. airline industry in over a decade. American turned away the overture, a development United acknowledged publicly in April. American Airlines CEO Robert Isom framed his opposition in competitive and consumer terms, and used colorful language to make the point: While United and American share Chicago as a hub, he said that made them "roommates" — not candidates to be "getting married," according to Reuters.
Investors had floated the theory that United might pivot to a smaller acquisition given the collapse of its bigger ambitions, but Kirby dismissed that scenario in blunt terms — "idiotic" was the word he used, adding it was "definitely not the plan." On the specific question of JetBlue, Kirby offered a numerical argument against the idea: closing a roughly 25-percentage-point margin gap between the two carriers would be, in his words, "mathematically close to impossible," according to Reuters.
Turning to the broader industry, Kirby predicted a contraction ahead for ultra-low-cost carriers, arguing that rising airport costs and pressure from bigger rivals had pushed them beyond the narrow leisure-travel segment where they actually generate profit — and that a retreat to that core would be necessary.