SURVIVAL OF THE FITTEST

 Over the last 25 years, the number of major airlines operating in the United States has shrunk, leaving just four dominant players: Southwest, American, Delta, and United. The combined market share of just these four airlines now represents over two-thirds of the U.S. domestic market. The primary cause of this recent consolidation in the airline industry has been merger and acquisition activity as larger airlines have acquired their smaller, regional rivals, in the pursuit of increased operating leverage, absorbing their assets and infrastructure to form ever-larger organizations with more aircraft, routes, and slots.

 The U.S. airline market has rewarded size and promoted the survival of the fittest, with efficiencies of scale available to the largest airlines including in pilot recruitment and training, fleet purchasing and maintenance, and customer loyalty programs.

Selected U.S. Airline M&A, Last 25 Years

On March 7th , 2023, the U.S. DOJ sued to block the merger of JetBlue and Spirit; despite this, JetBlue is proceeding with the transaction.

Sources of information: airlines.org, fish.substack.com, simpleflying.com.