TC 2010: ‘Alliances will drive airline consolidation’

ABTA Travel Convention logoFurther consolidation was predicted for the airline industry although alliances are more likely than full blown mergers.

Andrew Crawley, BA director of sales and marketing, told an e-tid briefing that there would be a lot more consolidation in places where the regulatory regime allowed.

He added the International Airlines Group that BA will form with the merger of Iberia and alliance with American Airlines would be a “proxy for consolidation”.

“The regulatory regime makes it difficult to do merger and acquisition activity. What you will see is consolidation probably converging around the alliances that exist already.

“The International Airlines Group that we will form is a device we will use to get round the table and do deals with other airlines.”

Crawley said the One World alliance had recently welcomed Indian carrier Kingfisher, although he said they have yet to have any footing in China.

“The regulatory regime is what’s stopping real consolidation and it needs to happen because the industry has been losing money for years.

“The global financial crisis was a stimulus in part for more deals to be done. The Iberia deal for us is a great deal and I’m sure you are going to see more deals like that.”

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