Before major consolidation can take place, however, Bouchard believes the airlines need to find a business model where they are no longer operating on the brink of bankruptcy. Low-cost airlines had eaten away at Alitalia's market share in particular, with Ireland's Ryanair having eclipsed it as the largest operator in Italy. TIGHT PROFIT MARGINThe pressure on former national carriers will only continue as low-cost airlines push into the long-haul segment, which has until now been an area where they enjoyed comfortable profits. Airlines took their first step towards consolidation in the 1990s with alliances which allowed them to share flights and run joint loyalty programmes. The equity stakes make the airlines "more cooperative on their business model" and "more interested in synergies", said Bouchard.

Source: New Strait Times August 27, 2017 09:33 UTC