The rise of European aviation's Big Three – and why it could mean higher airfares
Spohr's is not a lone voice. Air France-KLM already operates as one airline after the two carriers merged in 2004. The group recently snapped up 20 per cent of Sweden's SAS. International Airlines Group, parent company of British Airways, is eyeing up the Portuguese flag carrier, TAP, to add to its hangar-full of airlines: Iberia, Aer Lingus, Vueling and Level. The Portuguese government is planning a sale of either a minority or majority stake later this year.
If all the proposed European deals go through, a continent that 20 years ago boasted scores of distinctive and historic flag carriers – in 2003, Europe had 180 operational carriers – will be dominated by three conglomerates.
The emergence of these supergroups will be good for shareholders since larger, stronger groups can offer more services and connections out of hub airports. Conglomerates can also cut costs by jointly negotiating contracts for new aircraft and aviation fuel and by merging everything from lounges to IT.
But will it be good for passengers?
In some ways, it will. More successful airline groups mean more reliable service. Passengers who remember the haphazard performance of Alitalia, which filed for bankruptcy in 2017 and ceased operations in late 2021, will welcome the guarantee of reliability and financial discipline that Lufthansa brings. Speaking at Rome's Fiumicino Airport last week Spohr said his and ITA's aim was to make ITA profitable 'from this year'.
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