The aviation industry has seen its fair share of mergers and acquisitions over the years. Given the ongoing saga surrounding the potential acquisition of Spirit Airlines, we thought now would be a good time to look back in history at some of the biggest U.S. airline mergers and acquisitions of this century and see if they provide any signals as to what could happen next.  

For a full list of U.S. airline mergers and acquisitions, head over to Airlines for America.  

A Brief Timeline of Major Acquisitions in the 21st Century  

2001: American Airlines-TWA Merger 

The Deal: American Airlines announced its acquisition of Trans World Airlines (TWA), a major airline based in Missouri. The acquisition was aimed at increasing American Airlines' market share and expanding its route network. 

Challenges: The acquisition faced some opposition from labor unions, who were concerned about the impact the merger would have on jobs and wages. However, after negotiations and concessions from the airlines, the merger was approved. 

2005: America West-U.S. Airways Merger 

The Deal: America West Airlines announced its acquisition of U.S. Airways in May of 2005. What’s interesting about this deal is the brand of the acquired airline was kept, so the new airline operated under the U.S Airways name. The acquisition was aimed at expanding America West's route network and increasing its market share. 

Challenges: The merger faced some opposition from customers and employees of U.S. Airways, who were concerned about the impact the acquisition would have on the airline's culture and brand. However, America West worked to address these concerns and successfully completed the acquisition. 

2008: Delta Air Lines- Northwest Airlines Merger 

The Deal: Delta Air Lines announced its acquisition of Northwest Airlines, a major airline based in Minnesota. The merger was aimed at increasing Delta's global reach and improving its operational efficiency. 

Challenges: The merger faced some opposition from labor unions, who were concerned about the impact the merger would have on jobs and wages. However, after negotiations and concessions from the airlines, the merger was approved. 

2010: Southwest Airlines-AirTran Merger 

The Deal: Southwest Airlines announced its acquisition of AirTran Airways, a low-cost carrier based in Florida. The acquisition was aimed at expanding Southwest's route network and increasing its market share in the Southeast. 

Challenges: The acquisition faced some opposition from customers and employees of AirTran Airways, who were concerned about the impact the acquisition would have on the airline's culture and brand. However, Southwest Airlines worked to address these concerns and successfully completed the acquisition. 

2010: United-Continental Merger 

The Deal: United Airlines announced its acquisition of Continental Airlines, a major airline based in Texas. The merger was aimed at increasing United's market share and improving its operational efficiency. Although the merged airline retained the United name, it uses Continental's operating certificate and livery.

Challenges: The merger faced some opposition from labor unions, who were concerned about the impact the merger would have on jobs and wages. However, after negotiations and concessions from the airlines, the merger was approved. 

2013: US Airways-American Airlines Merger 

The Deal: One of the most significant airline mergers in recent history was the merger between US Airways and American Airlines. The merger, which was completed in 2013, created the largest airline in the world at the time. The merger was aimed at reducing operational costs and increasing profitability. 

Challenges: The merger faced several legal and regulatory challenges, with the U.S. Department of Justice initially opposing the merger. However, after a series of negotiations and concessions from the airlines, the merger was approved. 

2016: Virgin America-Alaska Airlines Merger 

The Deal: Alaska Airlines announced its acquisition of Virgin America, a low-cost carrier based in California. The acquisition was aimed at expanding Alaska Airlines' route network and increasing its presence in the West Coast market. 

Challenges: The acquisition faced some opposition from customers and employees of Virgin America, who were concerned about the impact the acquisition would have on the airline's culture and brand. However, Alaska Airlines worked to address these concerns and successfully completed the acquisition.

Lessons Learned & What’s in Store for the Future? 

As you can see, the airline industry has seen several mergers and acquisitions over the years. While these strategic moves have helped airlines increase market share, reduce costs, and improve profitability, they have also faced several challenges. 

Airlines must work to navigate these challenges and ensure that the merger is in the best interest of consumers, employees, and shareholders. 

One of the most significant challenges facing airline mergers is regulatory approval. Airlines must work with regulatory bodies to ensure that the merger does not violate antitrust laws and is in the best interest of consumers. 

Another challenge is cultural integration. Airlines with different cultures and values must work to ensure a smooth transition and avoid alienating customers and employees. 

Finally, airline mergers must be financially feasible. Airlines must ensure that the merger will result in increased profitability and not lead to significant financial losses. 

As we look to what potentially lies ahead, it is essential for airlines to continue to innovate and find new ways to improve profitability while also considering the needs of customers, employees, and shareholders in any future deal. 

Typically, for these deals to close significant negotiations need to occur and concessions have to be made by the acquiring parties. It will be fascinating to see how any potential Spirit deal plays out and what terms are negotiated in the process because what is currently being proposed will likely look different than what is encompassed in a finalized deal.

The aviation industry is constantly evolving, and airline mergers and acquisitions will continue to play a significant role in shaping its future. Especially in the current economic environment, it’s likely we’ll see several M&As in the coming years.