Almost certainly, there will soon be fewer U.S. airlines, as Delta, Northwest and many others, large and small, are driven to combine their businesses as a way to deal with high oil prices, a drooping U.S. dollar, and aggressive European competitors.
But the Europeans are not only trying to steal passengers from American carriers. Air France, Lufthansa, and British Airways will likely buy a piece of America's biggest airlines and may push U.S. lawmakers to lift limits that restrict foreign control to 25 per cent.
BusinessWeek reporter Dean Foust fingers cash-rich Air France as the most likely foreigner now looking at American opportunities. He thinks Air France will join in any Delta-Northwest combination; Lufthansa will want to be part of a United-Continental combination and British Airways could partner up with American Airlines or a regional carrier. Meanwhile, in Canada, ACE Aviation Holdings Inc., which owns Air Canada, is entertaining offers for that airline, believing that its stock market value does not reflect the value of the business. Canada, too, restricts foreign ownership of Air Canada to 25 per cent.