The Airline Business leader in our December issue was entitled "Merger mania" on the back of the move by US Airways to acquire Delta Air Lines. Just days after the magazine came out two other potential deals have been aired: a takeover of Australia's Qantas by a partnership of Macquarie Bank and the Texas Pacific Group private equity firm; and more talks between Air France-KLM about the Franco-Dutch carrier possibly taking over troubled Alitalia.
What is puzzling about the Qantas approach is that it includes Texas Pacific, which has successfully invested in Continental, America West, Ryanair and Tiger Airways. At the IATA Annual General Meeting in June its founding partner, David Bonderman questioned the wisdom of going anywhere near an industry that was past the peak as far as the cycle goes. "It's time to sell ladies and gentlemen," he said.
So now it's time to buy is it David? So what has changed your mind? Perhaps the industry is, after all, headed for a soft landing and the doomsayers are getting less gloomy.
Buying Alitalia has many more pitfalls, so don't expect this story to run anywhere as close as the Qantas one. Still Air-France-KLM is the logical partner in many ways for Alitalia and its board would be remiss if it didn't take another close look at whether a partnership could finally work.
Don't expect these moves to be the last of the merger plays as the takeover market starts to hype up.
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