WASHINGTON, April 7 - U.S. Transportation Secretary Sean Duffy said on Tuesday that consolidation in the U.S. airline industry is possible, but he emphasized that any proposed transactions would face close scrutiny over consumer impacts.
Speaking on CNBC, Duffy said that if a merger occurred among some of the larger carriers, the parties might need to divest certain assets. "If there was a merger between some of the larger airlines, they would have to peel off some of their assets," he said, adding that he would not pre-commit to any specific outcome.
Duffy noted that sharply higher jet fuel prices associated with the U.S.-Israeli war on Iran have contributed to speculation about a fresh round of consolidation in the U.S. airline sector. He also observed there is considerable discussion within the industry about potential deal-making. "Who knows who is going to match up?... Is there room for some mergers in the aviation industry? Yeah, I think there is," Duffy said, acknowledging "there is a lot of chatter" about possible deals.
The secretary underlined that any merger would require a sequence of approvals. Deals would need sign-off from the President, the U.S. Department of Transportation and the Justice Department, he said.
For decades, antitrust regulators have allowed a series of consolidations that resulted in roughly 80% of the domestic passenger market being concentrated among four U.S. carriers - American Airlines, Delta Air Lines, United Airlines and Southwest Airlines.
Recent examples of regulatory intervention include JetBlue's abandoned effort to buy Spirit Airlines. In 2024, JetBlue terminated its $3.8 billion merger agreement with Spirit after a U.S. judge blocked the transaction on anti-competition grounds. Separately, JetBlue announced a partnership with United, enabling travelers to book flights through either carrier's website and to interchangeably earn and use points in their frequent flyer programs.
In 2024, the Departments of Justice and Transportation under former President Joe Biden launched a broad public inquiry into competition in air travel. The Biden administration had made increasing airline competition a priority and pursued an assertive stance toward blocking consolidation attempts in the industry.
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