Stardate 20011001.0918 (On Screen): Times have been bad for airlines recently and they just took a major step downwards with the WTC attack, and now a major European airline is probably going to declare bankrupcy. Does every nation in Europe really need its own national airline? Is there really a need for Lufthansa
and SwissAir
and Air France
and KLM
and British Airways
and... Is the Netherlands really big enough to justify a national airline? (Nobody actually takes a jet to go within the Netherlands.) Wouldn't Europe be better served by some mergers, reduction of redundancy, and streamlining? In airlines as in nearly everything else, there is economy of scale. A larger airline can get better deals on jets and on fuel through mass buys and increased leverage in negotiations. And if an airline is multi-national, it may be more free from parochial political pressure to carry unprofitable routes because of national pride. Is it politically possible for Air France to merge with Lufthansa? (And what would the result be called, and where would it be based?) If such mergers don't happen, I suspect consolidation will happen anyway through selective business failures. Merge or die!
(discussion in progress)Update 20011004: CNN reports that the European airlines are considering consolidation to relieve overcapacity.
