Certainly this past week saw several key stories in the aviation world.
First came the story that Spirit Airlines could be liquidated at any moment, only to be followed later in the week by reports that the budget carrier had asked the Trump administration for anemergency bailout.
Then, of course, came the reopening of theStrait of Hormuzlate in the week, which sent jet fuel prices in New York sharply lower and airline stocks soaring...
It now appears that American Airlines has rejected United Airlines CEO Scott Kirby'sidea to merge the two carriers. Kirby recently pitched President Trump on the tie-up.
American toldThe New York Timesin a statement that it was "not engaged with or interested" in the merger idea pitched by CEO Kirby.
"While changes in the broader airline marketplace may be necessary, a combination with United would be negative for competition and for consumers, and therefore inconsistent with our understanding of the administration's philosophy toward the industry and principles of antitrust law," American said, adding, "Our focus will remain on executing on our strategic objectives and positioning American to win for the long term."
White House Press Secretary Karoline Leavitt told reporters earlier this week that the merger was "not something the president or the White House has an opinion on or is weighing in on at this time."
Wells Fargo analyst Christian Wetherbee told clients that the American-United merger was unlikely, but on his radar was "an opportunity for United and Delta."
"This idea furthers our belief that the fuel shock presents an opportunity for United and Delta to emerge better positioned, potentially suggesting upside to out-year estimates," Wetherbee said.
He noted a potential merger between United and American could be too large, as the combined carrier would control around 40% of domestic capacity without divestitures.
Source: ZeroHedge News
