Major European airlines are focusing on smaller deals and mergers to consolidate the “fragmented” market and compete with the more unified U.S. market and state-funded giants in the Middle East.
The aim is to make it easier to share aircraft, pilots, and crew, unlike larger mergers, which face more regulatory hurdles. They also seek to share airline networks.
At the same time, European regulators are concerned that large acquisitions could lead to higher fares and harm consumers.
An example is Lufthansa’s acquisition of a 10% stake in airBaltic for €14 million.
Many small consolidations between larger and smaller airlines have occurred recently, with more potential deals in the future.
For example, Portuguese airline TAP is still a possible target for full acquisition, valued at around $1 billion. However, it is currently in talks to sell a stake of no more than 50%. It has attracted interest from several European airlines, including Air France, which is reportedly ready to make a proposal, according to Reuters.
Aviation executives have long called for the consolidation of the European aviation sector to support struggling national carriers that are draining state budgets.
