Further airline mergers are essential to cut costs and improve competitiveness in an industry seeing sustaining combined losses of USD$2.8 billion this year, believes the head of airline industry body IATA.
"Mergers and consolidation is a must … No other industry is so fragmented, so we have to consolidate in order to build more efficiency," Giovanni Bisignani, director-general of the International Air Transport Association, told reporters.
He’s far from alone.
Consolidation is no "silver bullet" for what ails the airline industry, but mergers are inevitable and the business would benefit from a smaller number of carriers, according to the chief executive of American Airlines parent AMR Corp.
"There inevitably will be consolidation around the world in the airline industry," said Gerard Arpey said.
Bisignani called for regulatory support for barrier-free mergers across borders, explaining that different legal frameworks have hindered extensive global industry consolidation, involving, for example, US and European airlines.
"I’m raising the agenda of freedom on consolidation because we cannot do the same thing (as in Europe, where some cross-border mergers have been helped by unified legal frameworks) between an American and a European carrier."
Asked about a possible merger between United Airlines and US Airways, he said he would not comment on individual deals, according to Reuters.
"There are many, many conversations going on. Everyone is dating, but I make no comments on dating," Bisignani said.
By David Wilkening
