The European Open Skies coverage is spreading. It was announced today that Canada has reached an agreement with the EU to remove just about every restriction on flights between the two regions. While foreign carriers will still not be eligible to operate flights wholly on the other side of the pond, it seems that there will be no limits on foreign investment on either side of the deal. This could really change things in the industry.
Lufthansa has been on a ridiculous shopping spree of late, picking up carriers all over the place. They bought a piece of jetBlue earlier in the year. They just announced a deal to buy an additional 50% of bmi which will close in about a month. Austrian and Swiss are also now in the Lufthansa fold, and there are rumors of SAS, though I’m not sure how reliable those are. And Lufthansa has a pretty strong relationship with Air Canada thanks to their membership in the Star Alliance group and also thanks to some anti-trust immunity that they enjoy on trans-Atlantic flights. This deal opens up a chance for Lufthansa to buy part or all of Air Canada.
Even if Lufthansa doesn’t buy out part of Air Canada, the deal enables even tighter integration of their systems and route networks. A decade ago when the global alliances started up they were a necessity because no single carrier had enough coverage to provide service around the world. Recent moves by Lufthansa, the Delta/Northwest merger and rumors of a Qantas/British Airways link-up seem to be pushing the concept of these alliances towards a quaint historical reference. I don’t really think that they will go away, but a couple of behemoths are really trying to put their stamp on some of the most traveled routes to consolidate control.
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