In order to answer the question as to whether a merger for US would do any good, you have to understand the difference in the way each of the large US airlines have built their domestic networks and where their strength now lies.
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DL, NW, US, and WN were historically stronger in small and medium size cities than they were in the largest hub cities and it was from their strength in the smaller cities that they built their presence in the largest markets.
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CO (since their restructuring) and UA have always been larger in major markets while being much weaker in the smaller cities…. CO has had very little presence in small and outside sized cities.
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AA historically was stronger in larger cities but had a good presence in medium sized cities more of a hybrid of the two networks.
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In the past decade as WN has changed its strategy from being strong in airports where it could be the dominant carrier to developing a large presence in large airports, prices on many of the markets between medium and large markets have fallen.
With its high cost structure, AA has shifted its strategy from a hybrid with a decent presence in small and medium sized markets to having a strategy more like CO and UA. .
The UA/CO merger did little to improve UAs presence in medium and small cities and basically only served to concentrate UAs position in the largest markets and UA lost a lot of domestic market share over the past decade esp. to WN.
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DLs BK allowed it to regain its position as the largest domestic network airline outside of the major markets…. But DL also has focused a great deal of attention on picking up market share in major markets such as NYC, BOS, and WAS. By the time of the UA/CO merger, DL had become the largest airline in NYC based on passenger boardings, a few percent behind CO in revenue; the largest network airline in BOS, and the 2nd largest airline at DCA behind US…. Most of those gains were possible because of NWs domestic size but DL has also maintained a presence in key markets in the NE, even apart from the NW merger.
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It is no surprise that the 3 largest airlines outside of the largest big NE and California markets plus CHI are DL, US, and WN…. Because all three are lower cost operators than AA and UA.
The merger of DL and NW was a merger of two airlines that built their intl networks and their presence in larger cities based on their presence in small and medium sized markets while the UA/CO merger was largely the result of two airlines that placed their focus on the largest markets in the US, to the exclusion of many small and medium sized markets.
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Going into this fall and the capacity cuts that have been announced, it is noteworthy that UA/CO has significantly cut domestic capacity and based on schedules that have been loaded, DL will become the US largest domestic carrier, including connection carriers followed by WN/FL and then UA/CO. DLs domestic capacity growth is being driven as it has in recent months by upgauging of DCI flights and by additions of seats to the mainline domestic fleet.
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US domestic capacity is largely unchanged indicating that US mgmts strategy or rightsizing the domestic network has largely been completed.
When the DL/US slot swap goes through, it will likely result in more seats for both carriers as they more efficiently use the slots they gain vs. the ones they currently hold.
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While DL and WN have both aggressively been growing in larger markets, they have not given anything up in small and medium sized markets, which is why both have seen their overall domestic market share and revenue go up. AA and UAs domestic market share have gone down as it has concentrated its domestic presence in largely more competitive major markets YET because significant shares of the market in cities like NYC, LAX, WAS etc are from small and medium sized cities in which other carriers are now larger, AA and UA have lost market share even in their largest markets….and that trend will likely continue as DL and WN both attempt to build their presence in the largest markets based on their presence in the small and medium sized markets. US market share has stabilized but it has a decent and stable presence in its own small and medium markets, even if most are largely shared with DL.
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Thus, as long as AA and UA continue to lose their presence in small and medium sized markets, a US merger with either would only result in a short term improvement in US strategic situation because US network is undersized in small markets based on the size of AA and UAs network in larger cities and US network is geographically concentrated on the east coast.
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While a lot of people criticize US mgmt for a lot of things, they do understand the network aspects of the industry and are doing the best job they can with the network they have. US wasnt big enough to hold its own in larger markets like NYC and BOS but US mgmt does recognize their future strength will come from concentrating in the major markets where they can defend themselves like PHL, DCA, and CLT while holding onto their position in small and medium sized markets, which they are doing fairly well.
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It is possible that an AA BK and the lower cost that could come with it could provide US with a chance to buy AMR and gain a better shot at some of the key East Coast markets but given how aggressively DL and WN have expanded on the east coast, there is no assurance that US could achieve their goal.
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There likely wouldnt be near as much gained from a US merger with either AA or UA but it could distract US from doing what it has done relatively well which is maintain a solid #2 presence on the East Coast which has seen a lot of low fare carrier growth and that is not likely to change.
US best strategic path is to maintain what they are doing and become as global as they can from their current CLT and PHL hubs as well as to grow their other focus cities/hubs such as DCA as large as they can.
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US does not need a merger as much as some people think. They need to do what they currently do as good as they possibly can.
