The U.S. airline market today is dominated by four big airline companies: American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines. Together, they fly 78% of all of the seats in the U.S. market.
It was not always in this manner. At the turn of the 21st century, these very same four airline companies managed just over a 50% share of all seats in the U.S. domestic market, according to Bureau of Transport Statistics (BTS) information via Cirium Diio.
Eight huge airline company mergers because 2000 have actually reshaped the U.S. market. Storied names including Continental Airlines, Northwest Airlines, and United States Airways all disappeared into other brands– residing on just in memory and the uncommon heritage livery jet.
Now, 2 more mergers are proposed. JetBlue Airways wishes to purchase Spirit Airlines for $3.8 billion in an offer the Justice Department is trying to block. And Alaska Airlines has consented to buy Hawaiian Airline companies for $1.9 billion.
Here’s a timeline of the mergers that have improved the U.S. airline company market since 2000.
2001: American and TWA
Just 10 days into the brand-new year, American revealed plans to purchase long-struggling Trans World Airlines for $500 million in money plus the St. Louis-based carrier’s aircraft operating leases. At the time, the offer would leap American up 2 notches to be the second-largest U.S. airline company behind only Delta based upon overall seats, BTS data reveal. The deal closed in April 2001.
However American’s grand plans to use TWA to make itself a bigger, more powerful competitor was up to the wayside after the September 11 attacks. In the days and weeks instantly following the terrorist attack, the airline company required to make deep cuts to make it through. American parked all of TWA’s McDonnell Douglas DC-9 jets that October, and quietly folded TWA into itself that December. In 2009, American closed TWA’s previous St. Louis center, which it had when visualized as a third key Midwestern entrance after Dallas-Fort Worth and Chicago.
2005: America West and US Airways
On May 19, 2005, America West Airlines announced an offer to purchase bankrupt US Airways in a deal valued at $1.5 billion. The combined airline was led by America West management, consisting of CEO Doug Parker who will come up once again in the story of U.S. airline company mergers. It kept America West’s Arizona headquarters however embraced the United States Airways name.
The resulting carrier was the fourth-largest in the U.S. behind Delta, Southwest, and American in terms of seats, according to BTS data.
The America West-US Airways deal really was the first merger of the modern-day period. It showed industry executives that, by bringing two smaller sized airline companies together and increasing scale, the resulting provider could turn higher profits. The mix started the talks that would ultimately result in the mega mergers that brought us the American, Delta, Southwest, and United these days.
2008: Delta and Northwest
This actually was the very first airline mega merger. Yes, America West and United States Airways was big– but it was nowhere as big as Delta and Northwest. The deal, which was unveiled in April 2008, combined the 3rd (Delta) and seventh (Northwest) largest airline companies by seats in the U.S. into a new market leader with a 20% share of all domestic and global seats in and out of the nation, BTS data reveal.
The next biggest airline company, Southwest, just had a 15% share of just the domestic market. And the next largest global provider, American, simply had a 14% share.
The $2.8 billion offer closed that October.
(Delta News Hub) 2009: Frontier and Midwest The Frontier Airlines and Midwest Airlines merger is one no one really discusses since it came a cropper.
Regional airline company Republic Airways, with grand ambitions for its own significant carrier, purchased Midwest in July 2009 and Frontier out of insolvency that October. It combined the airline companies under the Frontier name. However the merger never was successful like Republic hoped, and the provider began trying to find a buyer in 2011. The eventual sale to personal equity company Indigo Partners in 2013, nevertheless, led the Frontier we understand today– the second largest deep discounter in the U.S. market. Frontier went public in 2021.
2010: United and Continental
Declared on Might 3, 2010, the United-Continental mix was the 2nd mega-merger in the U.S. market. The all-stock offer valued at $3 billion would see Continental’s CEO Jeff Smisek lead the combined company headquartered in Chicago under the United brand name.
The offer was an effective mix: Continental’s Houston and Newark centers added essential geographic strengths to United’s entrances, and gave the combined airline a big existence in Asia, Europe, and Latin America. And it would hurdle United up two notches to simply behind Delta as the largest U.S. airline by seats, according to BTS information.
The merger closed in October 2010, and Continental was totally integrated into United in 2012.
The combined United and Continental path maps after their merger in 2010.
(Edward Russell )2011: Southwest and AirTran While Southwest was long amongst the biggest domestic U.S. airlines, it did not have 2 big things as pressure installed from its ever bigger competitors: International paths and a substantial presence in the southeast. Go into AirTran with its Atlanta hub and its capability to expand to the Caribbean and Latin America. Southwest agreed to buy the Orlando-based provider for $1.37 billion, or $3.4 billion including financial obligation, in September 2010. The offer would combine the 2nd( Southwest)and seventh (AirTran )largest U.S. airline companies by seats, according to BTS data. The Justice Department authorized the merger in April 2011 and the deal closed that Might.
While not as big as either Delta-Northwest or United-Continental, the Southwest-AirTran combination would see the three largest U.S. airline companies each have an 18% or more share of seats in the market based upon 2010 numbers. That left just American and United States Airways out with 13% and 10% shares, respectively.
2013: United States Airways and American
If there is something to be said about US Airways and its management team lead by Parker, it’s that they never ever saw a chance too big to skip. They unsuccessfully attempted to buy Delta with an unsolicited deal in 2006. And, after seeing their rivals get progressively bigger, understood they required to do the very same.
That’s why when American applied for Chapter 11 personal bankruptcy protection in November 2011, Parker saw an opportunity. What proceeded was a year-long courtship that consisted of charming American’s labor unions, financial institutions, and eventually American management itself to reach the $11 billion deal that was announced on Valentine’s Day in 2013.
Parker would lead the combined airline that would be based in Fort Worth, Texas, and take the American name. The “new” American would be the market leader, vaulting the fourth- and fifth-largest U.S. airlines well ahead of the largest, Delta, with a 23% share of all domestic and worldwide seats, BTS data reveal.
After initial objections from the Obama Justice Department, the American-US Airways merger got regulatory sign off in November 2013 and the offer closed that December.
(Edward Russell)2016: Alaska and Virgin America
In April 2016, when Alaska revealed it would buy Virgin America for $2.6 billion, or $4 billion including financial obligation and aircraft leases, it proved the foil to JetBlue’s development ambitions on the West Coast.
It was no secret that JetBlue wanted Virgin America for itself, which Alaska simply offered more cash for the California-based provider. However ask Alaska, and the offer was not to block a rival, however for higher access to the competitive Los Angeles and San Francisco markets.
The mix combined the country’s sixth (Alaska) and 11th (Virgin America) biggest airline companies with combined seats that would make them a solid 5th in the U.S. market, according to Cirium Diio information.
The offer closed after Justice Department approval in December 2016.
Pending Mergers
JetBlue and Spirit: When Frontier and Spirit announced plans to merge in February 2022, JetBlue management jumped into action. They were not about to be excluded of U.S. airline consolidation again and unveiled a counter, unsolicited bid in April. What followed was a bidding war between Frontier and JetBlue, and the latter’s supreme win with a $3.8 billion deal– a $900 million premium over Frontier’s initial offer– that July.
What’s followed has actually been well recorded: Spirit investors approved the deal that October; the Justice Department sued to obstruct it in March; and the trial in the DOJ’s fit started in October.
If authorized– when the judge will rule is unidentified– JetBlue and Spirit would be the fifth-largest U.S. airline company by seats with an approximately 8% share based upon 2023 numbers, Cirium Diio data show.
Alaska and Hawaiian: In a surprise twist, Alaska revealed an offer to purchase Hawaiian for $1.9 billion including financial obligation on Sunday. The combined airline, which will run with 2 customer-facing brand names– Alaska and Hawaiian– would be the 5th largest in the U.S. with a 5% share of seats; they would be 6th if the JetBlue-Spirit offer is authorized.
Alaska CEO Ben Minicucci said Sunday that the airlines have actually not gone over the mix with the government, and the threat of a Biden Justice Department objection is very genuine. Assuming whatever goes to plan, Alaska and Hawaiian objective to close the merger by June 2025.