Recession no deterrence to Qantas Virgin mergers

first_img<a href=”” target=”_blank”><img src=”;cb=INSERT_RANDOM_NUMBER_HERE&amp;n=a5c63036″ border=”0″ alt=””></a> Source = e-Travel Blackboard: S.F A new wave of mergers is likely next year as conditions improve for European airlines, but the recession is still too fresh for carriers to consolidate this year, according to SAS group. But with pressure building on carriers to cut costs and boost traffic, many airlines remain open to the prospect reports Bloomberg. The CEO of SAS Group, Mats Jansson, said in an interview this week that following the losses of European carriers during the recession, it was simply “too early” to consider any merges this year. SAS own Scandinavian Airlines, and only survived the losses incurred by the airline due to share sales that gave greater control to the Swedish, Danish and Norwegian governments. “When companies feel they’ve done their homework, they’re in good shape and the market is stable, then boards will start to look at the acquisition list, but not now,” he said. But many airlines are already considering consolidation, with Virgin, Qantas and LOT this week all saying they were exploring their options. Virgin CEO Steve Ridgway, who attended the annual meeting of the International Air Transport Association (IATA) this week, said that U.S. and European mergers were challenging the airline’s position in the North Atlantic market, and as such it was exploring its own options. An inter-continental deal was the preferred option for Australian based Qantas, according to CEO Alan Joyce, who also attended the IATA meeting, adding that it would be “a great asset for anyone.” “Consolidation isn’t easy to do and cross-border inter- continental mergers have not occurred yet, but I think they will and Qantas will be at the forefront of that,” he said. Polish carrier LOT, which is predicting a return to profit after two years of losses, has attracted interest from certain airlines and investment funds, and is looking for a quick merge, said CEO Sebastian Mikosz. Ridgway also hinted at the possibility of Singapore Airlines Ltd. offering up its 49 percent stake in Virgin Atlantic, an airline currently outside any global groupings, as the carrier looks towards the expanding Indian and Chinese markets, but said it would not be happening any time soon.“Singapore Airlines is a great shareholder, and I don’t think they’re in any hurry to do that,” he said. “At the end of the day it’s down to them, but it could be an opportunity.”last_img

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