'Airline mergers' if EU/US talks fail

Lufthansa chief executive Wolfgang Mayrhuber sees European airline consolidation accelerating should talks to liberalise the …

Lufthansa chief executive Wolfgang Mayrhuber sees European airline consolidation accelerating should talks to liberalise the market between the United States and the European Union fail.

But, in a Financial Times Deutschlandinterview, he said Lufthansa, which bought Swiss International Air Lines two years ago, was not under pressure to buy another airline in the foreseeable future.

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

The United States 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.

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

European Union Transport Commissioner Jacques Barrot has said 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.