A number of industry consultants and some airline executives believe that Europe’s airlines, including numbers of its “flag” national carriers, need to consolidate to grow (or reach) profits.
They point to the experience in the U.S., where three mega-mergers and some smaller ones have resulted in all of them making money, in part because of their ability to tightly control capacity. The U.S. airlines account for nearly 40% of the industry’s world profits, while the Europeans account for about 11%.
The Reuters article quotes experts that European carriers will first have to get their financial houses in order (a process aided in the U.S. by bankruptcy reorganization). A Lufthansa executive speculates that Lufthansa (which has been buying smaller carriers) and International Air Group (British Air, Iberia, Vueling and perhaps soon Aer Lingus) will be among the survivors.
