Sat, Nov 27, 2004 - Page 10 News List

Carriers in Asia faced by consolidation: BA head

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British Airways Plc Chief Executive Officer Rod Eddington said that Asian airlines will follow the trend of consolidation in the US and Europe, with the region's weaker carriers going out of business.

Many airlines in Asia are heavily subsidized or fully owned by their governments, delaying reforms in the industry, Eddington said, without giving examples.

UAL Corp's United Airlines and US Airways Group Inc are in bankruptcy protection, while Air France-KLM Group was formed in May by the merger of the biggest carriers in France and the Netherlands. Soaring fuel prices are eroding profitability of airlines worldwide and the industry will make combined losses of US$4.8 billion this year, the International Air Transport Association has forecast.

"You will see genuine consolidation and true liberalization last in Asia," Eddington, 54, told reporters after a speech in Tokyo.

"The best Asian carriers will continue to be global players," he said.

The merger between Air France and KLM, which created Europe's largest airline, was "the very beginning of broad consolidation" in Europe, Eddington said.

British Airways is better positioned than its rivals to survive as the number of airlines in Europe shrinks, he said.

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