Warren, Lee raise concerns about distrust of a possible United-American alliance
‘Barron’s Roundtable’ panels discuss investment opportunities among airline stocks.
The Bipartisan Senator sent a letter to the CEOs of the United Airlines and American Airlines expressed concern about the possibility of a proposed merger between the two airlines and asked for more information about the impact of a potential deal.
The letter was sent by Sens Elizabeth Warren, D-Mass., and Mike Lee, R-Utah, who wrote that the merger between United and American “will unite two of the ‘Big Four’ US airlines into an ‘industry behemoth,’ controlling almost half of the US market of the airline industry and creating the world’s largest airline by revenue.
“Any proposed merger between United Airlines and American Airlines raises serious questions under antitrust law and raises the possibility of harm to American consumers,” Warren and Lee wrote.
The letter comes after reports that United chief executive Scott Kirby proposed meeting with the United States and sought President Donald Trump’s blessing for a proposed deal at a meeting in late February, according to Reuters. The newspaper reported that a source close to the White House was skeptical about the competitive impact of the deal and how it would affect consumers.
UNITED AIRLINES MERGER TALK SHINES CLEAR ABOUT FUTURE OF AMERICA’S CHIEF EXECUTIVE, EXPERT SAYS.
United Airlines and American Airlines are facing questions from bipartisan senators amid reports that the companies are considering a merger. (Samuel Corum/Bloomberg via Getty Images)
If a potential merger between the two airlines moves forward, it could invite regulatory scrutiny from government agencies and antitrust panels in Congressas a Senate subcommittee chaired by Lee.
In their letter, Warren and Lee expressed a number of concerns about the potential of the combined company raise prices for consumersit hurt the ability of smaller airlines to compete at the gate, and cut routes – especially those out of Dallas Fort Worth International Airport and Chicago O’Hare International Airport.
UNITED AIRLINES AIRCRAFT FAILS RISE $10-50 AS FUEL PRICES NEARLY DOUBLE SINCE IRAN WAR
| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| AAL | AMERICAN AIRLINES GROUP INC. | 12.24 | -0.54 |
-4.23% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 98.91 | -2.89 |
-2.84% |
They also raised concerns about job losses at the airline combined with the creation of monopsony power that results in the company “potentially depressing wages and benefits across the industry.”
Warren and Lee asked United and American CEOs to provide answers that the companies have negotiated the agreement directly or with other external parties. They also asked the airlines to justify how this merger would be beneficial to the public, as well as some questions about the costs of flights and payments, job losses and the elimination of routes under the merger.
AMERICAN AIRLINES JOIN WAVE OF CARRIERS FLYING FUND FUNDS VIEWED AS JET SKYROCKET PRICES
American said he is not interested in a merger with United. (Daniel Slim/AFP via Getty Images)
American Airlines said in a statement Friday that it is “not involved or interested” in merger talks with United.
“While changes in the broader airline market may be necessary, a combination with United would be detrimental to competition and consumers, and therefore inconsistent with our understanding of the industry’s management philosophy and the principles of antitrust law,” the carrier said. “We will focus on achieving our strategic goals and positioning America to win for the long term.”
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United Airlines declined to comment Friday.
FOX Business’ Robert McGreevy and Reuters contributed to this report.
