United Airlines to Acquire Airport Slots From Other Carriers

United Airlines is prepared to purchase airport slots, gates, and other strategic assets from struggling competitors, Chief Executive Scott Kirby said Sunday. Kirby spoke on the sidelines of the International Air Transport Association annual meeting in Rio de Janeiro. He told Reuters that full consolidation remains unlikely after American Airlines rejected a merger proposal earlier this year.

Kirby said in April that American declined to engage after he approached it about a merger. He raised the merger idea with President Trump in February. American CEO Robert Isom rejected a tie-up as anti-competitive and bad for customers.

Kirby said any large transaction would require support from the target airline’s management, which was not obtained in the earlier talks. He added that a transaction that large and unconventional could not be completed without support from American’s management. “I think consolidation is unlikely for United,” Kirby said.

Kirby defended the rationale for a deal with American, saying he believed it would have benefited consumers. He said he believed labor groups, shareholders and customers would have supported the deal, but American management’s public opposition made the transaction impractical. “You can’t have the management team on record publicly saying it was anti-competitive,” Kirby said.

U.S. government a golden share as part of any merger proposal. Kirby said smaller asset acquisitions remain possible if opportunities arise.

He said current pricing is nearly offsetting higher fuel costs for the airline and that United expects higher fares will put it on track to recover later this year the full hit it has taken from surging fuel prices. Demand has stayed strong, though United expects higher fares eventually to have some impact, Kirby said.

He added that fuel hedging has proven ineffective as a cost-control measure and that United is not interested in buying a refinery.