Bangkok--16 Nov--Centre for Asia Pacific Aviation
Centre for Asia Pacific Aviation Executive Chairman, Peter Harbison, stated "airline industry consolidation is fraught with challenges, but this does not dissuade the sector from attempting to rationalise".
Firstly, Qantas and Air New Zealand have abandoned plans for a codeshare agreement in the Tasman market following an adverse draft ruling by the Australian Competition & Consumer Commission. The Tasman agreement was in turn a watered down version of a previously disallowed comprehensive alliance.
"The non-deal will nonetheless trigger important changes on the Tasman. Qantas will seek to reduce costs, and may introduce more Jetstar operations, while retaining the Qantas mainline product on the key business routes," continued Mr Harbison.
According to Mr Harbison, "the certainty provided by the non-deal (in terms of market structure) may encourage Pacific Blue to expand on the Tasman. Air New Zealand will however need to maintain capacity levels in what is a crucial market for the carrier, but it clearly needs to explore other long-term options and Virgin Blue would have to come into the frame".
Meanwhile, US Airways (a member of the Star Alliance) has made a hostile USD8 billion cash and stock bid for SkyTeam member Delta Air Lines — a move rejected (initially at least) by Delta that wishes to 'stand on its own two feet'. If the deal proceeds, it could put further cracks in the global alliance structure.
American Airlines has also reportedly offloaded its stake in Iberia to oneworld partner, British Airways, lifting its interest in the Spanish carrier to 10%. British Airways played down speculation it intended to take-over/merge with Iberia, but the Air France-KLM and Lufthansa-Swissair combinations have triggered further inevitable consolidation in Europe. But progress will be challenging. Ryanair is encountering strong headwinds to its hostile takeover of Aer Lingus, a carrier that is exiting the oneworld alliance next year.
"Clearly, global alliance alignments and even differing airline business models do not cancel rationalisation moves at the outset. The more insurmountable challenges lie with regulators, creditors and competition authorities," concluded Mr Harbison.