The grounding of two independent carriers in May has raised the spectre of consolidation within Europe's increasingly overcrowded air market.

UK-based Duo Airways suspended operations in May, with administrators Deloitte & Touche swiftly making almost the entire workforce of around 300 redundant, dashing hopes of the airline returning to the air. The carrier, formerly Maersk Air UK until a management buy-out last year, had been struggling to raise additional investment. It had bases in Birmingham and Edinburgh flying a fleet of Bombardier regional jets to Scandinavia and continental Europe.

In Ireland, meanwhile, charter operator JetGreen Airways ceased operations just a week after taking to the air. The carrier was operating a single Boeing 757 from Dublin to Alicante and Malaga, but swiftly ran into financial difficulties. Irish regional Jetmagic ceased flying in January, 10 months after launching, also due to financial problems.

EasyJet chief executive Ray Webster warned at the French Connect seminar in Liverpool that there would be consolidation in the European low-cost sector, leaving just two dominant players - easyJet and Ryanair. Michael Cawley, Ryanair chief operating officer, also warned of further failures. "There will be a clean out next winter, including some of the bigger ones," he said.

Rivals dismiss talk of consolidation around only two players. "Its probably wishful thinking," says bmibaby managing director Tony Davis. "With 40 million Europeans using low-cost carriers, it also might be considered greedy. There will be at least three carriers." Philip Meeson, chairman of UK budget start-up goes further. "Some of these remarks are self-serving exaggerations designed to put people off entering the market," he says.

Meanwhile, at the International Air Carrier Association's annual general meeting, Air Berlin managing partner Joachim Hunold also warned of consolidation in one form or another. Air Berlin has itself established deals with other low-cost carriers including Germania, where it has taken over some routes into Zurich and Vienna on a wet-lease basis, and Austria's Niki, in which it has taken a 24% stake.

Source: Airline Business