American Airlines stock falls after rejecting United merger talks

Shares of American Airlines dropped nearly 3% in premarket trading after the company publicly rejected the idea of a potential merger with rival United Airlines.

The decline reversed gains from the previous trading session, as investors reacted to the airline’s firm stance against consolidation, News.Az reports, citing CNBC.

In a statement released late Friday, American Airlines made it clear it is not considering any deal.

The company said a merger with United would harm competition and negatively impact consumers, citing concerns over antitrust laws and regulatory scrutiny.

A combined airline would have created the world’s largest carrier, raising fears of reduced competition and higher ticket prices.

The merger concept had been raised earlier this year by United Airlines CEO Scott Kirby, who suggested that a larger airline could better compete internationally, particularly on long-haul routes to regions like the Middle East.

The idea has reportedly been under consideration for months, with discussions reaching as far as the White House.

Any potential deal would face intense scrutiny from regulators. Together with Delta Air Lines and Southwest Airlines, the two airlines already control about 80% of the U.S. domestic market.

A merger between American and United alone could result in roughly 40% market share, according to industry data — a level that would likely trigger significant antitrust challenges.

U.S. Transportation Secretary Sean Duffy has acknowledged there may be room for consolidation in the aviation sector, but warned that major mergers could require companies to divest assets to avoid creating monopolistic conditions.

While some investors see potential benefits in scale and efficiency, analysts widely agree that regulatory barriers make such a deal unlikely.

Legal experts have suggested that a merger of this size would face serious obstacles in court, given its potential impact on competition.

For now, American Airlines’ decision to reject talks signals that consolidation among the largest U.S. carriers remains a difficult path — both politically and legally.

News.Az 

By Aysel Mammadzada