Consolidation of Europe's airline industry is essential for its future, says British Airways chief executive Rod Eddington, but carriers must make the right calls on selecting partners if they are to survive.
In recent years, BA has had several aborted attempts to forge a stronghold in Europe, including two serious rounds of discussions about a merger with KLM. While he says this issue will not affect BA in the next three to four years, Eddington acknowledges the long term plan is to position the airline for "something in continental Europe".
Eddington expects to see a shake-out of Europe's weaker carriers over the next few years, and says there is a need for "intelligent consolidation" among the region's airlines with "two or three" strong players emerging.
"The successful carriers over the next 20 years will be the ones that make the right plays," says Eddington. "This is not just an efficiency issue, it's careful alliance and shares acquisition."
To illustrate the necessity for well-chosen consolidation, Edding-ton quotes the progress of the American "big three" - American Airlines, Delta Air Lines, and United Airlines following US deregulation in 1978 - comparing their success with the fate of Pan American World Airlines and Trans World Airlines.
Meanwhile Ireland's minister for public enterprise Mary O'Rourke has announced that national carrier Aer Lingus will be offered for private sale, rather than be floated on the stock market as planned.
Eddington says BA does not plan to take this consolidation opportunity, pointing out that existing bilateral agreements still require that more than 50% of the equity of international airlines is nationally held, and in any case BA and Aer Lingus are already in the Oneworld alliance.
Source: Flight International
