uncle beat

I question if there is actually a "storm" in the first place. There are problems in the industry to be sure, but mergers aren't generally about survival. These companies try to look like they are poor, hapless victims, and make it seem like the merger is a do or die situation so that they gain approval for these mega-deals, but in the end this is about creating a business advantage/power/control/domination, not survival.

DeltaFlyte

It's has always been about "survival of the fittest" and what better way to increase your odds that you are among them than a multi-faceted-merger within an Alliance. The airline industry is still in dire straights even though the price per barrel of oil has fallen sharply over the past couple of months. Everywhere you look you see airlines laying off employees, reducing seat availability, cutting several routes, deferring delivery of new aircraft, and downsizing their fleets. It's only a matter of time before the price per barrel of oil goes back up as the eye of the storm (Hurricane OPEC) moves ashore and obliterates any airline that is not best prepared to ride out the second part of the storm.

Had it not been for the global economic downturn, oil would have continued to climb as per supply and demand. People are hurting financially around the world, so they are not traveling nearly as much, especially by air. Great to see fuel costs come down whereas the airline industry is concerned; however, it doesn't do the industry all that well when people who usually fly can no longer afford to due to the economy which in this case would be the eye of the storm.

DeltaFlyte

AS RELEASED BY REUTERS NEWS AGENCY:

Australia May Ease Qantas Foreign Ownership Curbs

December 8, 2008

Australia will not allow an outright foreign takeover of national airline Qantas, but would consider raising foreign ownership limits amid merger talks with British Airways, a minister said.

Last week, Qantas, the world's 10th largest airline by market value, said it was exploring a potential merger with British Airways via a dual listed company structure.

Responding to the news, Transport Minister Anthony Albanese said in a television interview current legal provisions that require Qantas to be 51 percent Australian owned would not be revised.

The 1992 Qantas Sale Act also contains other provisions, he said, which the government would not revise. These include that Qantas must continue to be the international name of the airline and that it should continue to be based in Australia, as well as some citizenship requirements for senior management.

"Those provisions of the Qantas Sale Act we don't plan to make any changes to," Albanese told Australian Broadcasting Corporation (ABC) television.

But current limits on the level of foreign ownership, of a maximum of 25 percent for a foreign individual and a maximum of 35 percent for a foreign airline, could be raised to help improve Qantas's position, Albanese said.

"We think that consideration should be given to putting Qantas on a level playing field with other Australian-based international carriers," he added.

There were strong strategic reasons for an island continent, such as Australia, to retain a locally-owned national airline, he said, citing the recent need to put on extra flights to get Australian citizens out of Thailand amid mass political protests there.

Albanese said he called Qantas chief executive Alan Joyce to request this move.

Some bilateral air services agreements also required 51 percent control, Albanese said, citing Australia's pact with Japan.

"For example, only a 51 percent Australian-based airline is eligible to fly from Australia to Japan," he said.

"That's part of that bilateral agreement. So there are implications there that are significant."

More than 30 airlines have disappeared this year in consolidation move as the global aviation industry faces turbulent times, Albanese said.

(Reuters)