American Air explores Alaska Air revenue-sharing deal

American Airlines Group Inc. and Alaska Air Group Inc. are pursuing potential revenue-sharing agreements and other strategic partnerships, people familiar with the matter said, in a push for scale as the U.S. carriers grapple with higher costs and fierce competition.

The idea of a merger was raised as part of the talks around a stronger partnership, but did not get off the ground, said the people, who spoke on condition of anonymity because the matter is confidential.

The discussions include adding Alaska into American's existing joint business arrangements, principally its transatlantic partnership with IAG SA's British Airways, as well as its Pacific joint business with Japan Airlines, the people said.

Representatives for American Airlines declined to comment. Alaska Air said it doesn't comment on rumors and speculation.

Such partnership agreements allow airlines to coordinate schedules and pricing on certain routes and share revenue on those flights once approved by the U.S. Department of Transportation.

Expanding those arrangements could give American greater reach on the U.S. West Coast and strengthen connectivity through Alaska's Seattle hub, while providing the smaller carrier with deeper access to lucrative long-haul markets as it pushes global growth.

A partnership would also enable American, which is trying to boost sales and pay down debt, to better defend itself against more-profitable rivals United Airlines Holdings Inc. and Delta Air Lines Inc. in key markets.

The talks come as U.S. airlines grapple with higher fuel costs due to the war in the Middle East, which has squeezed margins and forced carriers to rethink growth plans. President Donald Trump's administration is close to reaching a financial rescue package for embattled Spirit Aviation Holdings Inc., Bloomberg reported on Wednesday.

United Chief Executive Officer Scott Kirby had floated a possible combination with American Airlines to senior government officials, including Trump, Bloomberg has reported. American has since said it's not interested in a merger with United, citing antitrust concerns, and Trump said Tuesday that he wasn't a fan of the idea.

Alaska Air operates a predominantly Boeing Co. fleet, and recently unveiled the largest order in its history. Alaska also owns Hawaiian Airlines, which it acquired in 2024.

(With assistance from David Carnevali and Allyson Versprille.)

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