European Governments See Renewed Importance of National Airlines

The largest European airline CEOs often complain about too many carriers fighting for market share. Yet there's little indication more industry consolidation is coming soon, at least among the continent’s larger independent legacy carriers. All it takes is one deal to get things moving. But there's some indication the rise of nationalism in European politics also may be influencing airlines, leading some to remain unaligned when they otherwise might be acquired by one of three major companies — Lufthansa Group, Air France-KLM, and International Airlines Group. "The changes in [the] geopolitical landscape have led to many governments being more observant about national interests," Finnair CEO Topi Manner said during the IATA Annual General Meeting, an annual conference of airline executives. Finnair might not be a contender for consolidation anyway, despite its small size. Its majority owner is the Finnish government, and Finnish politicians long have made it clear they do not wish to sell the company because of national and strategic reasons. But more countries seem to be adopting the Finnish mentality, whether or not they own an airline or share in an airline. Politicians may not care about prospective mergers of low-cost-carriers or leisure airlines, but if their country’s legacy airline has been around for five decades or more, many seem more interested in its future than they might have been several years ago. Under ordinary circumstances, some mid-sized European flag carriers might be ripe for acquisition, a group that includes Finnair, SAS, LOT Polish Airlines, Alitalia, and TAP Air Portugal. But with governments more interested in national airlines, it’s possible some may decide to go at it alone. "Nationalism, I wouldn't use the phrase," Manner said. "Protectionism is more of it.