Crisis and Concentration

http://www.german-foreign-policy.com/
Newsletter 2008/09/23 - Crisis and Concentration
VIENNA/COLOGNE (Own report) - A crisis-induced wave of fusions among European airlines companies offers a taste of the possible concentration of economic power that could develop out of the Western financial crisis. Lufthansa, a German corporation, is among the top beneficiaries. The airlines company is preparing the takeover of smaller competitors and is seeking to replace the current number one in the business, Air France-KLM. Its aim is to buy airline companies in Northern and Southern Europe and companies serving destinations in Eastern Europe and Africa. Only a third European airlines company, British Airways, can still compete. All others are being bought out or relegated to a marginalized existence. The current wave of fusions has been caused by the crisis in air travel. Features specific to this business sector (the acute rise in the price of kerosene), had already led to a stronger concentration than in other business sectors. But they are also beginning to feel the effects of the global financial crisis. In the struggle for takeovers, Lufthansa is benefiting from special relations, from exclusive contacts to Moscow, created for German businesses by the German see-saw policy.
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