United Airlines chief executive Scott Kirby believes the latest round of US airline mergers is over.
“There could be” another deal, he told reporters on the sidelines of the IATA AGM in Rio de Janeiro on 7 June. “But, you just asked me what I think, and I think there’s nothing.”
Kirby’s comments follow American Airlines management’s rejection of a potential mega-merger with United in April and his own dousing of industry chatter over a potential JetBlue Airways deal in May.
The leaders of Alaska Airlines, American and Delta Air Lines have also indicated limited interest in US consolidation, saying they are either focused on their own businesses or international growth.
“We want to finish what we have with Hawaiian,” Ben Minicucci, the chief executive of Alaska, said in May in response to questions over the airline’s interest in further consolidation. “We have a fantastic organic growth story.”
Alaska completed the customer-facing side of the Hawaiian Airlines integration in April when it successfully moved the smaller carrier over to its Sabre-powered reservations system. Joint collective bargaining agreements with the Alaska and Hawaiian labour groups are the last major step.
The latest US airline merger was Allegiant Air’s $1.5 billion acquisition of Sun Country Airlines, which closed in May.
“Everyone loves to talk about [consolidation] but … it’s hard and you shouldn’t do deals that don’t make economic sense. You shouldn’t do deals just to do deals,” says Kirby.
Kirby’s comments come as US airlines adapt to a changed domestic market following the collapse of Spirit Airlines on 2 May. Allegiant, American, Breeze Airways, Delta, Frontier Airlines, JetBlue, Southwest Airlines and United have all added flights to partially fill the gap.
Frontier and JetBlue, both of which unsuccessfully attempted mergers with Spirit in recent years, are among those moving most aggressively to pick up share from the failed ultra low-cost carrier. The former is adding flights in places like Dallas-Fort Worth, Detroit, Las Vegas and Orlando, while the latter is beefing up significantly in Fort Lauderdale.
Asked if he sees any further US airline failures in the next two years, Kirby says no.
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