Shares of United Airlines (NASDAQ:UAL) and American Airlines (NASDAQ:AAL) moved higher after reports that United’s CEO Scott Kirby has raised the prospect of a combination between the two carriers.
According to Bloomberg, citing sources familiar with the matter, Kirby discussed the idea with senior U.S. government officials. It remains unclear whether any formal process toward a deal has been initiated. Reuters also reported similar developments.
American Airlines shares jumped more than 4% in early premarket trading on Tuesday, while United Airlines rose around 2%.
United and American rank as the second- and fourth-largest U.S. airlines by market capitalization, respectively. A potential merger would create the largest airline in the country, surpassing Delta Air Lines. Both carriers also operate the largest fleets among U.S. airlines, each with more than 1,000 aircraft.
The Bloomberg report noted that any such deal would likely face significant regulatory scrutiny, particularly over competition concerns, even under the current business-friendly administration led by Donald Trump.
A merger between the two airlines would further concentrate the U.S. domestic aviation market, which is currently dominated by American, Delta, United, and Southwest Airlines.