CEO of United Airlines Scott Kirby rejected the possibility of a merger with the low-cost JetBlue Airways, amid speculation of talks between the two U.S. carriers.
Kirby said the math wouldn’t add up
Kirby was questioned about the rumours on May 17, during a Q&A session at Bernstein’s 42nd Annual Strategic Decisions Conference.
“The last thing I’m going to do is buy a route network that loses money,” he said.
The United executive reiterated that he did not understand how speculation about a merger with JetBlue had spread without any expressed intention on his part.
“I never understood why everyone thought we were going to do it. I never said it, never hinted at it,” he stated.
Kirby also explained that JetBlue would need to improve its margins by 25 percentage points for such a deal to be viable, arguing that this scenario seemed “mathematically close to impossible” to him.
Already surrounded by merger rumours
Speculation of United’s intentions to merge with JetBlue began in April this year, when it was revealed by Reuters that Kirby had pitched a potential merger with major competitor American Airlines in a meeting with U.S. President Donald Trump back in February.
After American dismissed talks towards a merger, many began to ponder whether the pitch was intended to prepare the market and government regulators for a smaller-scale deal.
In March, news website Semafor reported that JetBlue had hired advisors to explore a potential sale to a larger airline, asking them to develop scenarios for deals with Alaska Airlines, Southwest Airlines, and United Airlines.
United was viewed as a likely suitor since it already collaborates with JetBlue via their Blue Sky marketing and loyalty partnership, but the low-cost carrier later rejected these claims.
Do you think a United-JetBlue merger is off the table? Share your thoughts in the comments.
