Europe’s airlines may be readying for new, US-style merger round

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The unseemly scrabble that represents Europe’s airline industry at the moment will need to consolidate further if it is to take on the might of the Middle Eastern competition on long-haul and the low-cost competition on short routes, according to French export finance house Coface. While the carriers continue to struggle – Air France’s pilots yesterday threatening to strike indefinitely despite the €10-15m daily cost – and excitedly eye the low-cost market, Coface argues that the EU needs “super players”. But with strict laws on foreign ownership, and the likely consequence of higher fares and restricted competition if more mergers take place, it is hard to see how much the carriers can really do to lower their cost base.