Warren, Lee Launch Bipartisan Probe Into Potential United-American Merger As Air Travel Costs Continue To Skyrocket

Combining two of the "Big Four" U.S. airlines would create the largest airline in the world

"Any proposed merger between United Airlines and American Airlines raises serious questions under antitrust law and raises the likelihood of harm for American consumers."

Text of Letter (PDF)

Washington, D.C. - U.S. Senators Elizabeth Warren (D-Mass.) and Mike Lee (R-Utah), Chairman of the Subcommittee on Antitrust, Competition Policy, and Consumer Rights, pressed the CEOs of United Airlines and American Airlines on recent reports indicating that United CEO Scott Kirby has discussed a potential merger between these airlines. A United-American merger would create the largest airline in the world, exacerbating bipartisan concerns that consolidation of the airline industry could potentially harm consumers.

"A United-American merger could lead to increased prices for consumers, at a time when airlines are already squeezing flyers through higher fares and fees," wrote the senators.

Last year, United and American were the world's two largest airlines by available capacity. A deal would result in the combined entity owning more than 2,800 aircraft and being able to serve 405 million passengers, far more than any other air carrier in the world.

If United and American were to merge, airlines would face less competitive pressure from rivals to keep the cost of flying down, potentially leading to even higher fees and costs. Decreased competition between airlines leads to higher ticket prices and hurts smaller airlines' ability to access airport gates. Low-cost carriers such as Spirit and Southwest are already struggling to compete in the face of United's tactics at airports such as O'Hare.

A combination of United and American could also mean fewer flights if the combined entity determined it is no longer profitable to serve all current routes, reducing options for consumers. In particular, the merger would create a hub overlap at Chicago O'Hare and expand United Airlines' access to Dallas/Fort Worth, which is not currently a United hub.

The senators also raised concerns over potential job loss at a combined airline. Significant consolidation often suppresses wages and compensation across the airline industry as it reduces the number of competing employers bidding for workers.

"A United-American merger would enable the massive combined carrier to exercise monopsony power over airline workers, potentially suppressing wages and benefits industry-wide," wrote the senators.

To further understand United's and American's intentions, the senators asked that both airlines respond with more information regarding the nature of any discussions about a deal, whether hostile or negotiated, and whether a potential merger would affect fares for fliers, lead to higher ancillary fees, and create job losses at the airlines.

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