Lufthansa's purchase of a minority stake in Italy's loss-making ITA Airways injects fresh momentum into a wave of consolidation in Europe's fragmented aviation market that could see more mid-tier national carriers snapped up.
"You've got a lot of other carriers who are only there because of the perceived need to have a national flag carrier - and they probably find life quite difficult," said aviation analyst James Halstead, managing partner at Aviation Strategy.
TRA Consulting data show that in 2018 the top five carriers in Europe, including Lufthansa and Ryanair, controlled around 50% of the market, while in the United States - where operators consolidated earlier - the main airlines had an 86% share. Lufthansa's deal - and others such as Korean Air Lines' takeover of Asiana Airlines - are set to be hot topics at global aviation group IATA's annual meeting in Istanbul next week.But turning round an ailing airline is no easy feat, especially as low-cost carriers continue their rapid expansion in markets such as Italy and eastern Europe.
In the case of ITA, Lufthansa's greatest challenge will be to compete with Ryanair's almost 40% of market share in Italy, Europe's third largest market, and to offer enough of a competitive edge on mid- and long-haul flight options.
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Analysis: Lufthansa's ITA deal heralds more European airline tie-upsLufthansa's purchase of a minority stake in Italy's loss-making ITA Airways injects fresh momentum into a wave of consolidation in Europe's fragmented aviation market that could see more mid-tier national carriers snapped up.
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