If you’ve been watching the airline world in Europe, you’ve probably seen some exciting action. The consolidation of the major airlines is slowly taking shape in fits and starts.
With so many different reports coming from the continent, here is a scorecard as I see it. This synopsis should provide additional fodder for Christmas cocktail party chit chat.
British Aiways-Iberia merger
British Airways is in advanced talks with Iberia about a full-fledged merger. The core shareholder of Spanish air carrier Iberia, savings bank Caja Madrid, expects Iberia’s planned tie-up with British Airways to go ahead.
Lufthansa uniting German-speaking airlines and more
Over the past two months, Lufthansa has bought controlling stakes in Belgian Airlines, BMI, Eurowings and it seems, from recent reports, to have succeeded in buying control of Austria Air as well.
Alitalia adventures
Both Air France-KLM and Lufthansa are in the bidding process for the revamped Alitalia after an agonizing summer of intrigue with the Italian carrier. But Lufthansa has added a different wrinkle in the negotiations with the initiation of a new airline in Italy to compete with Alitalia that it hopes to buy.
I guess that if Lufthansa wins the Alitalia bidding, they will fold the new airline into Alitalia. However, if Air France-KLM ends up winning the bidding war for Alitalia, Lufthansa will still have a toehold in the Italian market. Looks like an attempt on Lufthansa’s part to have their cake and eat it too.
Ryanair becomes major player in Italy
Since the impending downsizing of Alitalia is not happening in a vacuum, other airlines are positioning themselves to take advantage of the new competitive landscape whether the main Alitalia partner is Lufthansa or Air France-KLM. There will be plenty of extra landing and take-off slots available for nimble competitors.
Ryanair has already announced a major Italian expansion of its service. It launches seven new international and four new domestic routes for Bologna in March 2009. Italy is now Ryanair’s second largest market after Britain.
Emirates Airlines dreams of an Italian hub
Emirates Airlines is looking at setting up their European hub in Italy. “Emirates, at present which has less than 10 Italian slots a week, has asked for slots for 21 weekly flights each to Rome and Milan and 14 for Venice. It also plans 28 weekly cargo flights.” No promises have been made yet whether Emirates will be guaranteed onward flights within Europe, but it seems to be understood.
Etihad Airways is also applying for seven slots at both Rome and Milan.
Scandinavian airline dance
Far to the north of Italy, Scandinavian airline (SAS) offered on to buy a 34 percent government stake in Estonian Air and take control of the carrier, a proposal the Baltic state indicated it was ready to consider. This move will bring most of the Nordic airlines surrounding the Baltic Sea under one umbrella. Finnair is the notable exception.
Aer Lingus fighting off Ryanair
Another sideshow (so far) in the European airline ownership dance is taking place in the minuette between Ryanair and Aer Lingus. Ryanair made a firm €1.48 billion takeover offer to Aer Lingus two years ago, but was rebuffed by stockholders, government workers and the EU. However, Ryanair is back making a new bid for Aer Lingus, for half of what it offered two years ago.
O’Leary, the CEO of Ryanair, claims that with continued layoffs at Aer Lingus over the past two years, the workers will be more amenable to a Ryanair bid. Ryanair plans for Aer Lingus include a doubling of the fleet size and the addition of a 1,000 new workers.
Enough for today. These machinations within the European airline world are enough to remind readers that the USA and Canada are not the only parts of the world where airline consolidation is featuring highly in the news. As things change, Tripso will report.
