Mergers At 30,000 Feet: Navigating Airline Consolidation
- IJLLR Journal
- Jun 22
- 2 min read
Yashpriha Rai, Bharati Vidyapeeth, New Law College (Pune)
ABSTRACT
This paper explores mergers and acquisitions in the airline industry and how they have shaped its future. It also outlines the industry's perspective trajectory through various case studies, assessing how these developments impact customer choice, competitiveness, operational efficiency, and regulatory frameworks.
Introduction
An important force behind economic growth and globalization is the aviation industry has seen a number of consolidations in recent decades. In addition to being financial moves, airline mergers and acquisitions are reactions to intricate market demands, rivalry, regulatory changes, and economic constraints. Deregulation has been one of the most important factors that has made these consolidations possible, especially in markets like the US and the EU. Deregulation allowed airlines to compete and combine more freely by removing government control over prices, routes, and market entry. Consolidation became a strategic instrument for growth and survival in this more dynamic and competitive environment. The purpose of this paper is to examine the main drivers of these consolidations and how they affect the aviation industry.
The concept of Airline Consolidation
The idea of airline consolidation was born out of the Airline Deregulation1 Act of 1978. Prior to this law, the airline business had a strong governmental control in place, with the government setting routes, prices, and entry into the market. The Deregulation Act, however, moved the control from government to private organizations, creating a competitive atmosphere that promoted Mergers and Acquisitions.
Since this time period, the airline sector has experienced a remarkable increase in consolidation, wherein airlines merge with each other or purchase another company to create bigger, more efficient airlines. Airline consolidation is the act of merging two or more airlines into an integrated organization or one airline buying another to establish a combined operation.
