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Lufthansa Sees EU Mergers if U.S. Talks Fail: FT

Reuters
Monday, 29 Jan 2007 | 3:40 AM ET

Lufthansa Chief Executive Wolfgang Mayrhuber sees European airline consolidation accelerating should talks to liberalize the market between the United States and the European Union fail, he told the Financial Times Deutschland.

But Lufthansa, which bought Swiss International Air Lines two years ago, was not under pressure to buy another airline in the foreseeable future, he said in an interview with the paper published on Monday.

If the U.S. government continued to refuse to allow foreign airlines to own more than 25 percent of U.S. carriers, this would "only hinder transatlantic joint ventures and increase the probability for European consolidation," Mayrhuber said.

The U.S. and the EU have worked for years on a deal to open the transatlantic aviation market to more competition and to replace the national-level bilateral agreements between Washington and some EU nations.

But a tentative deal sealed in November 2005 has remained in limbo after Washington withdrew a proposal to ease restrictions on foreign investment in U.S. airlines because of opposition in Congress.

European Union Transport Commissioner Jacques Barrot said on Thursday he would outline to members of Congress the potential consequences of blocking the deal when he travels to Washington in early February for talks on the stalled "Open Skies" aviation pact.

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