Scott Kirby apparently did not stop with American Airlines. Before approaching American about a merger, the United Airlines CEO reportedly called Delta CEO Ed Bastian to explore combining the two most valuable U.S. airlines. Delta considered the idea, but the talks went nowhere. That outcome was probably inevitable, but Kirby’s willingness to ask tells us quite a bit about how he views United’s future…and perhaps his own legacy?
Scott Kirby Reportedly Approached Delta Air Lines About A Blockbuster Merger
United Airlines reportedly approached Delta Air Lines last year about a potential merger that would have combined the two most valuable carriers in the United States.
According to The Wall Street Journal, United CEO Scott Kirby personally called Delta CEO Ed Bastian to pitch the idea. Delta executives reportedly discussed the approach and conducted preliminary due diligence, but the conversations did not progress and both airlines moved on.
Just imagine it.
United’s global network, Delta’s premium reputation, the combined loyalty programs of MileagePlus and SkyMiles, and enough corporate euphemisms about “synergies” to fill every seat on an A350-1000.
I suspect Tim Dunn would need a moment. 😉
Scott Kirby Apparently Wants A Very Big Deal
This is not the first time Kirby has explored a merger with another legacy carrier.
Earlier this year, it emerged that Kirby had approached American Airlines about a potential combination. American firmly rejected the idea, while CEO Robert Isom called such a tie-up anticompetitive.
Kirby later acknowledged the approach, saying:
“In the past, airline mergers usually have been about two struggling airlines coming together to cut costs, flights and headcount. My aspirations could not be more different.”
He argued that a United-American combination could have created growth, strengthened U.S. aviation, and produced benefits for customers. I called that argument malarkey.
A merger between United and American would not have been a rescue of two struggling carriers. It would have joined two enormous airlines with overlapping hubs, powerful loyalty programs, extensive international networks, and immense control over domestic aviation.
A United-Delta combination would have been even more audacious.
Delta and United have emerged as the two strongest U.S. global airlines, generating nearly all the industry’s profits between them in some periods. The idea that regulators would allow them to combine is very difficult to take seriously. But Kirby apparently took it seriously enough to pick up the phone.
Why Would United Want Delta?
Of course the merger failed, but the interesting question is why Kirby wanted to explore it in the first place.
United has already transformed itself dramatically under Kirby.
The airline has built the largest and most ambitious international network among U.S. carriers, invested heavily in aircraft and premium seating, expanded lounges, improved onboard service, and positioned itself as a far more credible competitor to Delta.
Kirby also openly respects Delta.
Delta spent years demonstrating that airline customers do not always choose solely on price. By offering a more consistent operation, polished branding, better employee engagement, and a premium-focused experience, Delta built remarkable customer loyalty and sustained a revenue advantage over its competitors.
United has borrowed heavily from that playbook while adding its own strengths, particularly its superior global network.
A combined United and Delta would have brought together:
- United’s powerful hubs in Newark, Washington Dulles, Chicago, Houston, Denver, San Francisco, and Los Angeles
- Delta’s dominant positions in Atlanta, Detroit, Minneapolis, Salt Lake City, New York, Boston, Seattle, and Los Angeles
- The two strongest premium strategies among U.S. airlines
- Massive loyalty and credit card businesses
- Extensive transatlantic and transpacific joint ventures
Operationally, it would have created a global airline without a meaningful U.S. peer.
Commercially, that is precisely why Kirby might have found the idea irresistible. It is also precisely why regulators would find it intolerable, making me once again question what Kirby was thinking other than knowing this would eventually be leaked and he would be viewed as bold and visionary (or perhaps as Dr. Strangelove).
Delta Reportedly Discussed It…
The WSJ indicates that Delta’s leadership discussed the approach and the merits of a potential transaction as part of preliminary due diligence.
Of course, when the CEO of a major competitor calls with a transformational proposal, a responsible board and executive team will examine it. They will evaluate the financial implications, legal barriers, shareholder value, competitive consequences, and whether the proposal has any plausible path forward.
But Delta had little reason to surrender its identity or independence.
As of Friday, Delta’s market capitalization was reportedly about $56 billion, compared with approximately $38 billion for United. Delta remains the more valuable company and has spent decades cultivating a brand that is distinct from its peers.
How would a merger have looked?
- Would Delta shareholders have received an enormous premium?
- Would Bastian or Kirby lead the combined airline?
- Would the company be called United, Delta, or perhaps Delta-United like Air France-KLM?
- Where would the new airline be based?
- Which alliance would the combined carrier remain in?
Combining United and Delta would make the troubled United-Continental integration look like a walk in the park…
There Is Almost No Plausible Antitrust Case
Kirby has framed his merger ambitions around growth rather than cuts.
That sounds appealing, but it does not solve the fundamental competition problem. A United-Delta merger would eliminate one of the most important competitive relationships in U.S. aviation.
The two airlines compete head-to-head for:
- Premium transcontinental traffic
- Corporate contracts
- New York and Los Angeles customers
- Transatlantic passengers
- Asia-Pacific growth
- Co-branded credit card spending
United has recently been taunting Delta over its Pacific expansion, while Delta has been openly trying to narrow United’s international advantage.
That competition is good for consumers. It encourages United to continually improve its product, forces Delta to invest in its lounges and premium cabins, and gives corporate travelers leverage when negotiating contracts and all consumers more choice. A merger would remove that pressure, even if the route map theoretically grew into something far more optimized than it is today.
Even under an administration perceived as friendlier to large transactions, this deal would likely have triggered opposition from the Department of Justice, state attorneys general, labor groups, consumer advocates, politicians, airports, and rival carriers. President Donald Trump reportedly expressed discomfort with the proposed United-American combination. A United-Delta merger would have been even harder to defend.
There is no obvious package of slot divestitures or route concessions that could resolve the underlying issue because the problem is not confined to a handful of airports.
So What Does Kirby Really Want?
Kirby has said he has little interest in acquiring a smaller airline like JetBlue and reportedly believes only a transformative deal makes strategic sense.
United does not need a merger to survive. It is already financially strong, internationally dominant, and growing rapidly.
Kirby appears interested in a transaction only if it fundamentally reshapes the industry.
Delta would do that (American would have too)
There is something almost admirable about the audacity. Most CEOs would never risk the public embarrassment of being rejected by two major competitors. Kirby apparently sees little downside in testing the boundaries of what might be politically or financially possible.
But there may also be a strategic purpose beyond completing an actual merger.
By raising these ideas, Kirby reinforces the argument that United is a consolidator, not a target. He signals confidence to investors and positions United as the carrier with the resources and ambition to shape the industry.
He may also believe that circumstances could eventually change.
Fuel shocks, economic downturns, labor disputes, debt burdens, or political shifts can make previously impossible transactions appear less impossible…
American rejected United today. Delta declined to proceed last year.
That does not mean Kirby will stop trying. It seems to me Kirby wants a legacy.
CONCLUSION
Scott Kirby reportedly called Ed Bastian last year to explore a merger between United Airlines and Delta Air Lines.
Delta’s leadership examined the proposal, but the talks went nowhere. Frankly, such a merger is so ludicrous that I cannot imagine Bastian’s jaw dropping when Kirby called.
But the approach reveals Kirby’s extraordinary appetite for scale.
He later pursued American, dismissed interest in smaller carriers, and made clear that he sees value only in a truly transformative transaction. Kirby apparently believes that becoming the world’s most powerful airline is worth making a few uncomfortable phone calls.
You cannot fault him for thinking big…but let’s hope none of this goes anywhere.
Think big, start small, learn fast!
Of course DJT didn’t favor a UA DL merger. This would cut into the amount of “donations”.
A virtually impossible wish.
Let’s recall that DL currently sits at the top of the industry in terms of premium ticket revenue, operational consistency, and valuation. DL executives have publicly poked fun at UA for trying to copy their premium strategy, meaning DL has zero financial or cultural incentive to absorb its chief rival.
I think the idea has merit, at least for the companies – the consumer would get royally screwed over. Kirby has demonstrated that he’s better as a number 2 at an airline although he eventually did well by following Munoz’s moves and following that direction after Kirby reversed his initial year or two of mistakes.
“…the consumer would get royally screwed over.” As is tradition, in this sad, sad era.
If the survivor is United Airlines, I see absolutely no problem with this. The faster the Widget disappears into the mists of history, the better.
Scott Kirby is one scared little puppy and deathly afraid of competition.
It’s no wonder DL is putting the pedal to the metal on their TPAC expansion.
DL is a little late to the party, though… And why on earth would they choose to go up against UA and CX on LAX/HKG? I don’t doubt that the Delta A350 is a pleasant way to travel, but United & Cathay both have a rusted-on loyalty base and multiple daily flights out of LAX. What else have they got planned, and will those new routes be commercially viable?
and yet we have been listening for 10 years to statements that DL can’t win its way into indjstry competitive markets where another airline already has a stronger presence.
DL first overtook AA and B6 at JFK, then at LGA, then opened a hub at SEA on top of AS, and then became the largest airline at LAX (where AA was larger) and now has overtaken B6 at BOS.
DL has the best track record in the US airline industry of growing in markets where other airlines are stronger – and yet still reports the largest profits among US airlines.
DL execs said months ago tha tthey would become a serious competitor to UA on the west coast and on TPAC and they will overtake UA at LAX as the largest international even if MNL is the last new TPAC route they add – but there will be more.
DL has a lot of brand equity in Asia just like it has in N. Texas 20 years after closing its DFW hub. DL was once the largest airline across the Pacific as a result of NW’s size; NW didn’t make money and DL has spent the last decade regrouping.
I have said for years that it would be easier for DL to grow on TPAC than it would be for UA to grow its presence in the domestic system – and this information confirms that Kirby knows it can never achieve what AA, DL or WN have in the US domestic market, let alone DL’s level of profitability.
I think Kirby is trying to move the Overton window of what is considered possible/plausible in the realm of airline consolidation. He’s smart enough to know that even if Delta were enthusiastic about a merger, federal regulators, state attorneys general, and federal judges would be three huge obstacles to overcome. But now that it’s out there, a merger with any other airline seems slightly more reasonable. Maybe an investment in a foreign carrier like Delta’s 49% stake in Virgin Atlantic?
Well, he has until at least January 2029 to do whatever he wants. Laws no longer apply. Regulators no longer enforce. Antitrust is a joke. If he pays his bribes, Kirby can get jetBlue’s gates and slots, and if Delta allows it, merge, too. But, he may not want to. The guise of ‘competition’ may be more lucrative than actually letting the dog catch the car.
are you speaking about the $1 million donation to the presidential inauguration that resulted in FAA caps on EWR, ORD and SFO and the extension of those caps until at least next year?
The evidence is quite obvious that money can’t buy what UA needs – the ability to grow in large competitive markets – and their efforts to curry the admin’s favor not only hasn’t worked in 2 years but isn’t likely to win in the remaining 2 years until a regime change inevitably takes place (as political history says it usually does)
“regime change”??
Tim, “you had my curiosity but now you have my attention.”