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IAG looks at three potential mergers

20 September 2011

British Airways was late to the airline merger party when it finally combined with Spain’s Iberia in January to form International Airlines Group, Europe’s third-largest carrier by revenue.

First, Lufthansa, Europe’s largest airline by sales, is considering selling BMI, its lossmaking UK subsidiary that has much sought after take-off and landing slots at Heathrow airport. Second, the Portuguese government is preparing to privatise TAP, or Transportes Aéreos Portugueses, the country’s flag-carrier. Third, there could be the chance to take over Aer Lingus, the Irish flag-carrier of which Mr Walsh was once chief executive.

Amid a deteriorating economic environment, the main benefit from consolidation could be to ease the pressure on airlines’ revenues. Fewer carriers means less competition, which in turn should mean different pricing tactics by the remaining airlines.


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