Summary Over the years, there have been several major mergers in the aviation industry. This has included the formation of some of the largest airline groups, including Air France-KLM and the International Airlines Group (IAG). Some airlines were forced to merge due to very difficult situations in the market.
" Unity is strength ". The airline industry was not immune to this truth. With the progressive deregulation of the industry and other developments in the market, incumbent carriers had to promptly adapt their management philosophy to new and rapidly changing economic conditions.
In the United States, a significant change brought about by deregulation was the birth of the low-cost business model, which soon translated into increased competition and the need to cut costs . Airline mergers soon proved to be an efficient strategy to ensure profitability and enhanced market accessibility while avoiding overcapacity. Furthermore, by matching their international and domestic networks, airlines achieved significant cost reductions in developing solid global hubs.
Over the last two decades, several airline mergers have occurred, some of which led to the birth of "mega airlines" destined to change the dynamics of the worldwide aviation industry. 5 The "royal" marriage of the sky: British Airways The merger, which was the beginning of British Airways, created one of the largest airlines in Europe. Merger happened in 1974 Merging airlines: British Overseas Airways Corporation (BOAC) and British European Airways (BEA) During the 1980s, British Airways adopted one of the most iconic slogans in aviation history - the world's favourite airline.
However, did you know this airline resulted from a 'royal' marriage? In 1974, British Airways was established following the merger of the United Kingdom's (UK) then two largest carriers, British Overseas Airways Corporation ( BOAC ) and British European Airways ( BEA ). Initially, BOAC was the UK's state-owned airline, while BEA operated as BOAC's European division. However, in 1946, it separated and became a registered company.
After failed attempts to merge the carriers, the UK government appointed the Edwards committee to design the future of the country's aviation industry. The committee supported the merger of the two carriers, which happened on March 31, 1974, which resulted in the creation of British Airways. A look at the carriers that came together to form British Airways and the historic 1974 merger process itself.
4 Finding the right one: Air France-KLM The merger created one of the first airline groups in Europe. Merger happened in 2004 Merging airlines: Air France and KLM Like in real life, airlines sometimes struggle to find the right match, as the merger of KLM with Air France showed. The ties between these two carriers date back to 1958 when Air France and KLM actively supported the creation of a European alliance, Air Union, which would have included Alitalia and Lufthansa.
In 1994, KLM again played the alliance card with the Alcazar project , but in vain. Aiming to become Europe's largest airline, in 1999, KLM proposed a merger-like partnership with Alitalia . However, the two carriers failed to align their interests, leading KLM to withdraw from the agreement.
In a state of financial hardship, KLM's path once again crossed that of Air France. On May 5th, 2004, the two carriers merged with a $882 million deal that ensured both airlines a stronger competitive position against their competitors in the market, While it was a challenging quarter for Air France-KLM, the group will have a huge task on its hands: to respond to the demand for the Olympic Games. 3 Fighting economic hardship: Delta Air Lines and Northwest Airlines The merger set off a string of deals that consolidated the US airline industry Merger happened in 2009 Merging airlines: Delta Air Lines and Northwest Airlines By 2008, the US economy had been shaken up by various events, including the 9/11 terrorist attacks, the Iraq war, and the dawn of what was destined to become a worldwide financial crisis.
Delta Air Lines and Northwest Airlines , two of the country's largest carriers, saw the chance to overcome such hardship with a merger. This merger led to the birth of the then-world's largest airline, counting over 800 aircraft and operating 6,400 daily flights. The combined value of the two carriers equaled approximately $17.
7 billion, with an annual revenue of around $32 billion. The two airlines combined their air operator's certificates (AOC) into one on December 31, 2009, in a process that began in 2008. By the time it merged with Delta Air Lines, Northwest Airlines hubs in Detroit Metropolitan Wayne County Airport (DTW), Memphis International Airport (MEM), and Minneapolis–Saint Paul International Airport (MSP) offered connections to 250 destinations, relying on a fleet of 320 aircraft (including freighters).
The former carrier left behind a sizeable legacy. 2 The "Golden Globe" of aviation: Continental Airlines and United Airlines While United Airlines became the successor company, Continental Airlines' livery has lived on Merger happened in 2010 Merging airlines: Continental Airlines and United Airlines In the late 2000s, United Airlines faced hardship as it had continued to lose market share to low-cost carriers while also facing a challenging economic environment. Following the example of Delta Air Lines and Northwest Airlines, United Airlines entered talks with the Houston-based Continental Airlines , which was also desperately trying to restore its financial position.
Merging on March 31, 2010 , United focused capacity on the West Coast and Asian markets, while Continental had a large market presence on the East Coast and Europe. The two airlines decided the new carrier would operate under the former's name, United Airlines, while the new airline would take over Continental's golden globe logo. By the time the two airlines merged, United became the world's largest airline.
Get the latest aviation news straight to your inbox: Sign up for our newsletters today. Mergers were seen as a way to grow the network and save money. 1 The new American: American Airlines and US Airways The merger created one of the largest airlines in the world Merger happened in 2013 Merging airlines: American Airlines and US Airways Following a series of mergers with different carriers , in 2013, American Airlines joined forces with US Airways , taking over the title of being the world's largest airline from United Airlines.
By the time it merged with American Airlines, US Airways operated a fleet of 344 aircraft and flew to 193 destinations. The carrier's considerable size dated back to 2005 when it had merged with America West Airlines, which already operated a fleet of 132 aircraft. The new entity had to agree to some conditions for the merger to be accepted by competition authorities, including giving up slots at New York LaGuardia Airport (LGA) and Ronald Reagan Washington National Airport (DCA).
The US Airways brand officially disappeared in October 2015, almost two years after its merger with American Airlines..
