An increasingly bold Scott Kirby says United Airlines has no interest in buying JetBlue, dismissing the idea as “idiotic.” I believe him…but only if we are talking about JetBlue as it exists today.
Scott Kirby Says United Won’t Buy JetBlue, But The Math Could Still Change
United Airlines CEO Scott Kirby is mocking the idea that United wants to buy JetBlue, even as United and JetBlue move forward with their new Blue Sky partnership.
Speaking at Bernstein’s 42nd Annual Strategic Decisions Conference, Kirby was asked about consolidation and whether United’s interest in American Airlines was somehow a prelude to pursuing a smaller deal like JetBlue.
He did not exactly mince words, scoffing at that theory:
“It’s just idiotic…I don’t understand that at all. That was definitely not the plan.”
He then explained:
“It’s not about room to get the deal done. I have immense respect for Joanna and her team and what they’re trying to do, and I wish them luck. By the way, we’re going to try to help them be successful. I already talked about discipline. I’ve been disciplined enough to close three hubs. The last thing I’m going to do is buy a route network that loses money.
“I think for us, I look at that, you can do the math too. We got to somehow think we can improve JetBlue’s margin by 25 points to make it work. That seems mathematically close to impossible to me. I never understood why everyone thought we were going to do it. I never said it, never hinted at it. I never understood why everyone thought we were going to do it.
“It just seems mathematically not doable and I’m pretty good at math. I never understood it.”
What I don’t understand is why Kirby is pretending that he never hinted about a JetBlue merger. Last year, he went so far as to say a merger is “up to them.” He’s also said:
“I have a lot of respect for JetBlue, because they have the same core customer DNA that we have. We want lifelong customers who believe in United, who love the brand. JetBlue comes from a similar culture and DNA.”
> Read More: United Airlines CEO Says JetBlue Merger Is “Up To Them”…But He’s Holding All The Cards
> Read More:
Kirby Is Right About JetBlue Today
Kirby is not necessarily wrong in saying it would be “idiotic” to buy JetBlue now for two reasons.
First, there is no likely suitor lining up to buy JetBlue (something United would pay a premium to block). Second, as JetBlue continues to struggle and bankruptcy looks more likely, Kirby is looking ahead to a better deal in the future, regardless of who controls Congress (whether that is the airline itself or just some slots at JFK).
JetBlue today is arguably not an attractive acquisition target if you have to buy the whole thing, assume the debt, integrate the workforce, inherit the money-losing network, deal with labor complexity, and then try to convince regulators that consumers will somehow benefit.
United wants access to JFK and more relevance in New York beyond Newark. It is chasing premium customers and likes JetBlue’s brand reputation and East Coast customer base. But that does not mean United wants JetBlue itself, even if it could do a much better job of running JetBlue. The $8 billion in debt is staggering considering United made only $6.5 billion in profit over 2024 and 2025.
Kirby has been disciplined before. He mentioned closing hubs and we see that United under Kirby is willing to walk away from flying that does not make sense (though he has not closed any hubs during his tenure at United).
On the other hand, you could argue that if JetBlue were run correctly the operation could quickly become profitable, there is a ton of loyalty money on the table with credit card partners, and JFK would be an ideal traffic feeder for many Star Alliance partners.
Is This As Simple As Waiting For JetBlue To File For Chapter 11?
A restructured JetBlue would be a different conversation. If JetBlue went through Chapter 11 and shed debt, the math could change very quickly. United may not want JetBlue’s current route network. But would United want a cleaned-up JetBlue with JFK access, a stronger New York footprint, and hubs in Boston and Fort Laurderdale?
I think so, which is why we continue to discuss a potential merger.
I do not view Kirby’s latest comments as slamming the door forever. Instead, Kirby is saying United is not going to overpay for JetBlue as currently constructed.
The Blue Sky partnership gives United much of what it wants without the pain of a merger. That may be enough…or it may simply be the first step…but Kirby (rightly or wrongly) thinks he can hold out for a better deal and I don’t fault him for that.
If JetBlue stabilizes, perhaps the partnership remains just a partnership. If JetBlue deteriorates further, United may be able to pick up the parts it wants without buying the whole thing at today’s price. Kirby is not stupid. He is not going to say from a conference stage, “Yes, we are waiting for JetBlue to weaken so we can buy it cheaper.” Instead, he says the current math does not work.
Again, I believe him. But math changes.
CONCLUSION
Scott Kirby says United is not buying JetBlue, calling the idea of buying a money-losing route network financially absurd. Based on the numbers today, he is probably right.
JetBlue is operationally unprofitable and burdened by debt. United does not need all of it, and Kirby is too disciplined to buy a weaker airline just because it has some assets he likes.
But now we play wait and see. The Blue Sky partnership already gives United a taste of what it wants: JFK access, a closer relationship with JetBlue, and a way to test the commercial upside. If JetBlue remains as it is today, a merger may make no sense. But if JetBlue restructures or the math changes, United’s view may change too.
image: @scottkirby/Instagram
Blue sky is a diligence exercise for UA while they consider whether to buy all or parts of B6 out of chapter 11.
On the flip side, let’s recall that B6 CEO Joanna Geraghty confirmed that the airline is strictly “playing it safe” regarding corporate combinations. Following the federal government’s previous antitrust shutdowns of B6’s Northeast Alliance with AA and its attempted merger with NK, B6 has zero interest in pursuing another heavily scrutinized merger. B6 is instead focusing on its internal “JetForward” profitability turnaround plan.
I think B6 knows that the path for it to go alone is a very narrow one with many potholes!
So, let’s “wait and see”!
It will be funny if Alaska /AA spoils Kirby subtle plan . A little chess game on an airport tarmac brewing…..
Then United would get the slots it wants at JFK as part of the DOJ approval of an AA/Alaska acquisition of JetBlue.
Which, by the way, would come at zero cost and VERY little complexity.
I’d be very happy to see either AS or AA acquire B6.
+1!
No one is taking on Jetblue’s $8B in debt.
Kirby quote: “I’ve been disciplined enough to close three hubs.”
Matthew: “. . . he has not closed any hubs during his tenure at United”
Which is it? And what hub closings are being referred to?
When Scott Kirby worked at America West Airlines in 1990s, the airlines had a mini-hub at Columbus, Ohio. The hub was closed after a decade.
America West merged with US Airways in early 2000s. Scott became US Airways senior management. The enlarged airlines had a hub in Pittsburgh. The hub was gone during US Airways bankruptcy reorganization.
I can only count two.
Las Vegas (US Air)
CMH, PIT, LAS at US Air.
Were those his personal decisions?
Something that you did not address, Matthew, is that a UA/B6 merger (whenever it would happen, would give UA at last a presence in Florida, the Caribbean and parts of Latin America that it just doesn’t have now.
I mentioned the FLL hub, which is something I think UA would actually really like and would be a way to compete with AA’s MIA hub.
I’ve often thought it would be great for United to have a hub at FLL to compete with Miami just like Newark competes with JFK.
This is a good take on the subject. Kirby is trying to spin, knowing darn well that he’s jump on JetBlue if the conditions were right. And rightfully so: their network, fleet and customer base are a perfect fit for UA. New market share in BOS and JFK and n actual southern (and Latin American) hub at FLL? Yes, please.
It’s just a matter of watching and waiting until the time is right. Very shrewd.
bankgcupy ?
Fixed.
(and these idiots think I have AI deliberately write in mistakes like this into my copy…lol)
Kirby is a buzzard circling JetBlue, waiting for them to declare chapter 11 while keeping potential alternatives to United at bay. I don’t actually begrudge him that but I dearly wish he would stop the stupid hyperbole. He’s supposed to be a captain of industry, not some crazy uncle who got off his meds and escaped from the attic again.