The 2011 merger of British Airways and Iberia exemplifies a current trend in the airline industry in Europe and other regions. Limited demand has led to surplus capacity, legacy carriers face strong price competition from budget airlines, and high fuel prices keep costs high. These factors lead to low profitability, which is driving a fragmented industry to consolidation
Scope of this research
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Research and analysis highlights
In 2011, British Airways and Iberia merged as International Airlines, one of the world's largest airlines. Regulation makes transnational mergers and acquisitions in the industry difficult. The holding company structure of International Airlines is designed to comply with such regulation and facilitate further acquisitions.
Budget airlines offer strong price competition on some routes. Cost control is difficult in an era of high fuel prices. Consolidation is seen as overdue in the airline industry, due to its fragmentation and the difficulty of achieving strong profit margins, and is proceeding.
Key reasons to purchase this research
When did British Airways and Iberia merge?
What forces are driving mergers and acquisitions in the European airline industry?
How successful has the British Airways-Iberia merger been so far?