Here is my 2 cents worth…
Merger activity will happen primarily in Europe and the US. Asia is too economically diverse to allow extensive regionwide cross border investments (although some will occur between some countries) and much of what will happen in Latin America has already happened. I don’t think there will be much more bankruptcy action. Alliances have worked so far but you can't get costs out if each airline operates their own headquarters and has different fleets, certification, etc.
Foreign ownership restrictions will come down between the US and Europe but the US will negotiate for it – primarily access to key markets like London – rather than make it available to all countries. Because there is so much consolidation that needs to occur on both sides of the Atlantic and because there will be greater but not complete access to markets between the US and EU, European and US carriers will focus on opportunities in their own region before they look across the Atlantic. The environment is ripe for consolidation in Europe and the US and all affected governments are tired of propping up money losing airlines. Low cost carriers are so pervasive in the US and EU that the threat of monopolies no longer exist; LCC’s dictate the fare structure even if they don’t fly into a city based on their presence in one nearby.
In the US, USAirways is setting itself up as a fine candidate to be acquired – they are too small to survive on their own but could nicely fill out AA
’s network (both will be hard pressed to come up w/ cash but AA
is probably most likely to figure out how to make it work) or provide a foundation for a European carrier who will probably need another US carrier to round out their US portfolio via an alliance.
is the most likely acquirer w/ their less than complete international route network, their collection of underperforming hubs outside of ATL
, and the best of the big six balance sheets. DL
’s CEO has said most often that consolidation is necessary to cure industry ills. While CO
has been mentioned before, I predict they will go after NW
who will find it increasingly difficult to compete given that they used most of their trump cards to succeed financially during the early 90’s; you can only go to the well (employee concessions, cost deferrals) so many times. There are big obstacles to a DL
-NW merger but their networks complement each other; both airlines have enough older fleet types that it is possible to unify their very different fleets by getting rid of some older types which should be possible when several hubs (CVG
, and SLC
) are closed. DL
will beef up presence on the west coast and provide the feed to the Pacific operation which NW
has not done. DTW
still has huge growth potential which would benefit from DL
's huge RJ
is likely to be able to survive as a standalone carrier (their stated intention) and could be a strong partner w/ a foreign airline – it could merge w/ HP
to add some west coast depth and could take over either DEN
depending on which become available.
are both capable of standing alone but one will fight to get US – the only real answer to beefing up the East coast – except for AirTran perhaps (although that is not real likely).
realize they can better grow themselves internally than acquire or be acquired.
In Europe, BA
, and LH
will be the acquirers as well as the Virgin group. Current alliance lines will probably closely approximate how ownership could occur. AZ
, and LX
are probably most at risk of being acquired and having their hubs downsized if not eliminated. KL
is probably going to go w/ BA
(I know this has been discussed before) because BA
knows that the price for being able to acquire other EU carriers is to open up LHR
to the US carriers and they must have at least one strong continental Europe hub to preserve flows over LHR
which are at risk when they have to give up slots to US carriers. LX
could both fit nicely in BA
’s portfolio but LH
will closely watch their flanks and keep BA
out of central Europe.
My thoughts…how about someone else…