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By IKU KAWACHI School of Communication University of Miami Since the Airline Deregulation Act of 1978, a landmark piece of legislation that lifted numerous operating restrictions and allowed the nation’s airlines to compete more freely with each other, some 200 carriers have merged, been taken over, or gone out of business. Within the last five years alone, mergers have taken place between US Airways and America West, Delta and Northwest, United and Continental and, most recently, Southwest and Air Tran. “It tends to happen in bunches, until Washington becomes concerned and tries to block it.” That doesn’t even include the collapses of Aloha Airlines and ATA Airlines or the failures of “airlines within airlines,” short-lived divisional brands like Ted (United) and Song (Delta).
That is, of course, only until it was leapfrogged in passenger-miles flown by United Airlines, which completed its .2 billion merger with Continental Airlines this May.
“There are far fewer domestic flights than there were 10 years ago,” Flint said. spending on airfare as a percentage of GDP has never recovered to 2000 levels.” It is increasingly becoming a necessity for carriers to seek mergers and other partnerships to strengthen their foothold in the market.
One recent study conducted by investment research company Morningstar, Inc., suggested that American must “take drastic action if it hopes to compete against its larger foes” and that “any scale advantage it may have [once] garnered is gone.” “There was, and is, too much capacity in the industry,” George Hobica, founder of Web-based discount airfare service Airfarewatchdog, said.
"We have been active on this for many years," he said.
"If there are opportunities, we surely will be ready."The carrier currently has a bid in for Thomas Cook's Condor unit, which Lufthansa previously sold its shareholding to Thomas Cook between 20.
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At this year's IATA AGM, industry players have been facing a slowdown in profits on the back of higher costs and global trade wars.