Phê Vé
April 23, 2026 • 4 min read
Scott Kirby, the CEO of United Airlines, recently discussed the airline trade deficit in the U.S. and proposed some controversial solutions. This article analyzes his arguments and offers a counterpoint.
The Current State of the U.S. Airline Industry
Having spent over 18 years writing about the airline industry, I find this moment particularly strange. It's not just the Trump administration considering a stake in Spirit Airlines; there are many other issues emerging within the sector. Among U.S. executives, Scott Kirby, the CEO of United Airlines, has one of the most powerful voices, yet his views often spark debate.
Kirby is intelligent and has made significant contributions to aviation, but he can sometimes come across as overly confident, making statements that leave many questioning his perspective. One of the recent topics he frequently addresses is the U.S. airline trade deficit, and I find myself unable to agree with him.
The U.S. Airline Trade Deficit
Recently, Kirby suggested the idea of merging United with American Airlines to create a mega airline. While this concept may sound outrageous and detrimental to competition, Kirby openly claims it is for the public good. He asserts that the U.S. faces a significant trade deficit in aviation: "Today, we have a large trade deficit with international airlines. Many of these are essentially state-owned companies or subsidized by their governments. They operate 65% of long-haul seats into the U.S., but only about 40% of the passengers are citizens of those countries. This is detrimental to the U.S. airline industry and American workers."
He questions how to create an American airline that citizens can be proud of. While this might sound reasonable, the reality is far more complex.
Ineffective Solutions
In my view, Kirby's argument lacks substance. The fact is that U.S. airlines face significant cost disadvantages compared to foreign competitors, and it’s not solely due to subsidies. Operational costs in the U.S. are much higher, with salaries for pilots flying large aircraft reaching over $400,000 annually. This makes it challenging for U.S. airlines to compete with the offerings of many foreign carriers.
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Moreover, U.S. airlines have long relied on "outsourcing" numerous flights to international partners, which benefits both parties. The reality is that through joint ventures, airlines can still maintain substantial profits from their loyalty programs.
Understanding the Market and Competitive Needs
Claiming that only 40% of passengers on foreign airlines flying to the U.S. are from those countries overlooks the relative scale of nations. For instance, most Lufthansa passengers connecting through Frankfurt come from other countries. But is that really a concern when Germany is much smaller than the U.S.?
Furthermore, Americans do not want a single airline to be "proud" of. They need competition, as it drives down fares and enhances service quality. The U.S. is a vast country with a large population and high travel demand, unlike Singapore or New Zealand, where a single global airline could adequately meet demand.
Factors Driving Competition
The competition in the long-haul market is bolstered by the presence of three major alliances cooperating in most regions, creating a healthy competitive environment. If U.S. airline services were merged with one or two other carriers, it would likely only increase the market share of non-allied foreign airlines.
Conclusion
Ultimately, it remains unclear how the creation of a "mega" U.S. airline would address the trade deficit. Even if American, Delta, and United were to merge, it’s likely that the total capacity wouldn’t increase compared to when each operates independently. Remember, Kirby seems to be pushing the message that "United is God's gift to the world and should be at the center of everything in aviation." However, for those with a more objective viewpoint, this is hard to accept.
In summary, Scott Kirby argues that the U.S. airline trade deficit is a significant issue that requires consolidation to create an airline that everyone can be proud of. However, this argument lacks logic and practicality. What do you think of Kirby's perspective?
Article referenced and edited from: One Mile at a Time
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