"Consolidation", surtout dans l'UE

Lufthansa chief Wolfgang Mayrhuber has reiterated the need for consolidation in the European air transport market, stating that it should not be obstructed.

The German flag-carrier is in the process of acquiring Brussels Airlines, Austrian Airlines and BMI but the tie-ups are subject to European regulatory scrutiny.

Speaking during Lufthansa's annual general meeting today, Mayrhuber said: "Important foundations have been laid in the consolidation process.
"The further consolidation of airlines in Europe is a prerequisite in order to be able to succeed in global competition.

"It is in the interest of the business location and employment market that no insurmountable obstacles be placed in the way.".

European Union competition authorities have already expressed doubt over the fairness of the Austrian acquisition and extended an inquiry into the Brussels Airlines takeover.
Lufthansa has also recently notified the European Commission of its intention to take control of UK operator BMI..

Two big U.S. airlines open to merger

NEW YORK (Reuters) - Top executives at two of the five largest U.S. airlines said on Tuesday they are open to a merger, adding that the airline industry needs to consolidate to return to profitability.

Speaking at the Reuters Travel and Leisure Summit in New York, United Airlines chief financial officer Kathryn Mikells said the third-largest U.S. airline is open to merging with U.S. or foreign carriers.

"UAL has been supportive of consolidation for a long time," Mikells said at the summit. "It is something we will continue to look at."

US Airways Chief Financial Officer Derek Kerr, in a separate interview at the summit, said his airline was open to merging with another U.S. carrier.

The fifth largest U.S. airline is not interested in merging with a foreign airline, Kerr said, because that would not help the domestic market.

"I don't think that will make a difference," he said. "Domestic is where there is too much fragmentation and there are too many airlines."

Either way, both executives are looking for the right merger, and the two had come close to merging with each other in 2008, sources had then told Reuters.

The airline industry has lost $50 billion in the past 10 years, including $11 billion of red ink in 2009 alone, according to the International Air Transport Association.

The trade association expects the industry to take at least three years to recover from the slump in demand caused by high fuel prices and a pullback in spending amid a weak economy.

"Consolidation is one of the major ways this industry can become profitable," Kerr said.

When asked why US Airways was not approaching another carrier, Kerr said: "It's difficult for the No. 5 player to make a move on No. 1 through 4."

The four largest U.S. carriers are Delta Air Lines, American Airlines, United and Continental Airlines.

Neither United nor US Airways are strangers to mergers: US Airways was acquired by America West in 2005 and it tried, and failed, to buy Delta in 2007.

Sources had told Reuters that US Airways had parallel talks with United and Continental about a possible merger in 2008, when Delta was merging with Northwest. The talks ended as United decided to pursue an alliance with Continental instead.

"It's five major carriers, it's too fragmented," Kerr said of the U.S. airline industry. "You have too many hubs, all chasing the same passengers trying to connect through the country. We believe that it needs to be consolidated."

BARRIERS TO GLOBAL M&A

Mikells said barriers preventing foreign airlines from entering the U.S. market were blocking global mergers at a time when airlines needed scale. Current U.S. law restricts foreign ownership of U.S. airlines to 25 percent of voting stock.

"Clearly, outside of the U.S., consolidation is under way," Mikells said. "Not being able to participate in that in a more material way just really positions the U.S. companies detrimentally, relative to international carriers."

Absent mergers, the airlines are focusing on making the most of alliances. United and US Airways are both part of Star Alliance, a global network of carriers that allows them to streamline costs while sharing revenue.

Star Alliance, which competes with Oneworld and SkyTeam, is seeking more partners, Kerr said. United's Mikells also said the carrier was looking to add members to its alliance, especially in regions such as South America and Africa.

Kerr said alliances are not complete substitutes for mergers but do help in getting some synergies. "One thing that is very hard to do across alliances is cost-cutting," he said.

Delta et Air France lorgneraient Virgin Atlantic

LONDRES (Reuters) - Delta Air Lines, première compagnie aérienne américaine, a contacté en secret le principal actionnaire de Virgin Atlantic pour mettre la main sur la compagnie britannique avec la complicité d'Air France-KLM, rapporte dimanche le Sunday Times.

Delta, croit savoir le journal londonien, a proposé à Singapore Airlines de reprendre ses 49% dans Virgin. Si l'opération aboutit, Air France-KLM pourrait ensuite acquérir une partie des 51% de l'entrepreneur Richard Branson, qui perdrait alors le contrôle de la compagnie qu'il a fondée en 1984.

Richard Branson a engagé un réexamen stratégique de Virgin Atlantic et mandaté il y a deux ans Deutsche Bank pour étudier d'éventuelles offres de reprise.

"Nous discutons toujours avec de nombreuses compagnies de sujets divers mais nous ne commentons jamais les détails", a dit dimanche une porte-parole Virgin Atlantic.

Delta et Air France-KLM étaient proches d'un accord pour acquérir Virgin Atlantic en février 2011 mais les négociations ont achoppé sur le prix et les droits de Richard Branson sur la marque Virgin, indique le Sunday Times.
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