World countries agree on agenda for possible airline mergers

A meeting on Monday by the US, the European Union and six other major flying countries paved the way for possible airline mergers. The ‘agenda for freedom’ was agreed upon by the eight which could potentially help out the crippled airline industry that has struggled in the last two years mainly due to the worldwide recession. The International Air Transport Association (IATA) said they have been trying to get some sort of liberalisation on the rules for some time now and this is a major step forward to helping out the airline industry.

British Airways (BA) and Iberia are currently trying to work a merger deal announced last week, but talks have being going for some time now. With the chance of rules becoming relaxed it could well happen as early as next year. BA have been losing money for some time now, in the last financial year they lost an estimated £401 million and this year is not faring much better, as they are expected to announce first-half year losses, a period usually meant to  be the most profitable for airlines in general.

With the EU and America agreeing on the freedom agenda, it accounts for around 60 per cent of the world flying market and with the added Chile, UAE, Panama, Malaysia, Singapore and Switzerland all agreeing the same, this could lead to a worldwide change. Most other countries still work on a rule that prohibits mergers of airlines from different countries, but BA and Iberia will for come under the EU and not cross borders.